Extension Allowed to Make 2010 Charitable Contributions From IRAs

The recently signed Tax Relief Job Creation Act includes an extension of a provision allowing taxpayers who are 70 ½ or older to continue to make charitable donations directly from their individual retirement accounts this year and next.

The provision, which was originally enacted in 2006 as part of the Pension Protection Act, allows eligible taxpayers to directly transfer up to $100,000 tax-free each year to charity as part or all in some cases of their required minimum distribution, RMD. It is now set to run through 2011.

It also allows individuals to make the charitable transfers through January 31, 2011 and treat them for tax-filing purposes as if they were made during 2010. That gives taxpayers extra time to make some year 2010 donations.

Taxpayers who avail themselves of this provision should confirm that IRA distribution forms from custodians and financial services firms reflect these transactions.

Please contact us if we can assist with respect to planning for and implementation of this matter.