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Since 2006, IRA owners age 70½ and older have been able to make a qualified charitable distribution up to $100,000 each year.  Changes in the tax law that were recently enacted as part of the American Taxpayer Relief Act of 2012 extends and expands this option for 2012 and 2013. 

Thus, there are three categories of potential donors. 

First, some individuals in 2012 made qualified distributions directly from their IRA custodian to charities with the hope that the law would be retroactive.  These qualified distributions are qualified retroactive to January 1, 2012.  Second, individuals who did not make a qualified distribution in 2012 can do so during January of 2013.  This is similar to 2011, when it was possible to do a qualified distribution for the prior year in January and a second qualified distribution in the remaining 11 months of the year.  If an individual has not made a qualified distribution in 2012, this allows a generous person to make two $100,000 qualified distributions in 2013. 

Third, many individuals had hoped to do a qualified distribution in 2012, but in December of 2012 received their IRA required minimum distribution.  If these individuals transfer those funds to charity during January of 2013, they will not report the IRA distribution as income.  Effectively, the December 2012 required minimum distribution is converted to a January qualified distribution that qualifies for 2012. 

I hope this information helps you. Please feel free to call me should you need further assistance. 

//DaveExternal Link

David A. Nolle | Scout Executive/CEO


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