The IRA Charitable Rollover

On December 18, 2015 President Obama signed into law the PATH (Protecting American Taxpayers and Homeowners) Act, which includes not merely an extension of the IRA Charitable Rollover, but which makes it PERMANENT.

The legislation keeps in place all of the previous requirements that must be met in order for the charitable transfer to qualify:

  • The donor must be at least 70½ years  of age when the gift is made;
  • Transfer must be made DIRECTLY from the IRA administrator to the charity;
  • The gifts from the IRA cannot exceed $100,000  per person ($200,000 for a couple with separate IRAs) in a given year;
  • They can  only be outright gifts (can’t fund a life-income gift such as a Charitable Gift Annuity or Charitable Remainder Trust);
  • There is no charitable deduction, but the donor does not include the amount distributed in their federal taxable income;
  • The distribution counts toward the donor’s Minimum Required Distribution for the current tax year;
  • The law is retroactive to January 1, 2015 and is now permanent (2015 gifts must be transferred by December 31st);
  • The Rollover provision applies only to Traditional IRAs, not to 401(k)s, 403(b)s, and other similar retirement plans – gifts must be made directly to a qualified charity and may not be made to donor advised funds, private foundations or supporting organizations.  Gifts may also be made from Roth IRAs, but distributions from a Roth are generally tax-free to the donor anyway, depending on the donor’s age and the length of time the Roth IRA has been in place.

Contact your IRA plan administrator to proceed with a Rollover gift.