URGENT: IRA rollover reinstated permanently

New legislation was just passed that allows anyone 70 ½ or older with an IRA to distribute up to $100,000 directly to a qualified charity, such as the Pacific Crest Trail Association, without paying federal income taxes. Action needs to be taken quickly as PCTA, or any nominated charity, has to receive the distribution by December 31, 2015 in order for the donation to qualify for federal tax free status in 2015.

Anyone considering this strategy should consult their tax or financial advisor to determine how a distribution from your IRA to the PCTA will impact your particular situation.

The charitable IRA rollover, or qualified charitable distribution (QCD), is a special provision allowing certain donors to exclude from taxable income (and count toward their required minimum distribution) certain transfers of Individual Retirement Account (IRA) assets that are made directly to public charities.

A  lupine filled campsite in William O Douglas Wilderness. Photo by Eric Valentine.

A lupine filled campsite in William O Douglas Wilderness. Photo by Eric Valentine.

Here are some FAQs concerning IRA Rollovers:

What gifts would qualify for a 2015 charitable IRA rollover?

A gift that qualifies, technically termed a “qualified charitable distribution,” would be:

  • Made by a donor age 70 ½ or older
  • Transferred from a traditional or Roth IRA directly to a permissible public charity, such as the Pacific Crest Trail Association.
  • Completed in calendar year 2015 for the 2015 tax year.

Who can benefit from using the charitable IRA rollover to make a gift?

  • Persons making gifts that are large, relative to their income. (Because a charitable rollover is not included in taxable income, it does not count against the usual percentage limitations on using charitable deductions.)
  • Persons with significant assets in an IRA.
  • Persons having so few deductions they chose not to itemize.

If I made a charitable IRA rollover gift in other tax years, can I do this again for the 2015 tax year?

Yes. Even if you and your spouse both made the maximum $100,000 charitable IRA rollover gift to a qualifying charity during one or more previous years, you can still take advantage of this legislation again for the 2015 tax year.

For more information on IRA Charitable Rollovers or other gift planning inquiries, please contact Associate Director of Philanthropy, Mark Waters, at [email protected] or (916) 285-1846.

Author: Mark Waters

As the Pacific Crest Trail Association’s Associate Director of Philanthropy, Mark helps develop compelling opportunities for donors to support the PCTA and make the experience of giving satisfying and rewarding. He enjoys spending his free time playing and exploring with his sons.