By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP
Over the past decade, Congress has passed a law – usually at the last minute – that allows for gifts directly from Individual Retirement Accounts to charitable organizations with favorable tax treatment. The gifts can be up to $100,000 to qualifying organizations, but it has to be made directly to the charity. The IRA gift provision has been a popular way for some to give to their favorite organizations, for two key reasons:
- The gift counts towards your required minimum distribution from your IRA for the year. As you may know, seniors ages 70.5 and up are required to take a minimum distribution from their IRA each year.
- The gift is excluded from taxable income. The money won’t be included in your taxable income (as it would otherwise) if the money is paid directly to the qualifying charity.
Only those who are 70.5 or older can take advantage of it.