IRA Charitable Rollover Made Permanent
President Obama has signed the Protecting Americans from Tax Hikes (PATH) Act, which makes permanent several provisions that were previously enacted year to year; which made any kind of careful tax planning very difficult. One provision that was revived and made permanent is the IRA charitable rollover provision. This provision permits individuals who have reached age 70 1/2 to make a direct transfer from their IRAs to certain kinds of charities (excluding donor advised funds, supporting organizations and private foundations). There is a $100,000 annual limit on such transfers. The amount transferred is not included in the IRA owner’s income, and there is no income tax deduction for the transfer. It’s a provision that applies only to those who have reached a certain age, and it’s really only a tax benefit to some taxpayers, as compared to taking a distribution and then donating it to charity. But for those who can benefit from it, it’s now permanently in the tax law.