December 28, 2015 — You only have a few days left to do it, but you can now once again make a qualified charitable donation from your IRA in 2015, and not have that donation count as taxable income. The re-authorization of The IRA Charitable Rollover provision is one of many outcomes of the Congress’s recent Omnibus spending bill (PATH Act of 2015). The provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA). The change is permanently reinstated. The payment must be made directly to the charity from the IRA or 401k.
The problem with this good news is that most people have probably already taken their 2015 Required Minimum Distributions (RMDs), so they are out of luck for 2015. However if you haven’t yet made yours, you have a few days left in 2015 to take advantage. And going forward in future years, you can donate up to $100,000 to qualified charitable organizations.
You can find the text of Section 408 9d)(8) here:
“So much of the aggregate amount of qualified charitable distributions with respect to a taxpayer made during any taxable year which does not exceed $100,000 shall not be includible in gross income of such taxpayer for such taxable year.”
Finance Committee Chairman Orrin Hatch (R-Utah) highlighted that the change…
“would, for example, make sure that charitable distributions from IRAs remain tax-free on a permanent basis.”
For further reading:
Time is Running Out for Taking Your RMD