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Tax-Free Distributions From IRA to Charity | Tax Tip of the Week | No. 75 January 12, 2011

Posted by bradstreetblogger in : Tax Tip, Taxes, Uncategorized , trackback

2010 Tax Relief Act

The recently signed 2010 Tax Relief Act extended the availability for taxpayers who are receiving required minimum distributions (RMDs) from an IRA to contribute that amount to a charitable organization. The extension applies to contributions of distributions for all of 2010 and 2011. Also, RMD distributions to a charity can be made in January 2011, and elected to be treated as an RMD for 2010.

Taxpayers over age 70 ½ who elect this option do not get a charitable deduction of the amount distributed.  Instead, the distribution fulfills their RMD requirement and is a tax-free distribution.  To qualify, the trustee of the IRA must send the distribution directly to the charitable organization.

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Rick Prewitt – the guy behind TTW

…until next week.

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