IRA Charitable Rollover signed into law

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On December 18, 2015, President Obama signed the PATH Act  of 2015  (Protecting Americans From Tax Hikes) that permanently extends the IRA charitable rollover opportunity.

Each IRA owner age 70.5 and over may make a tax-free gift of up to $100,000 per year directly from their IRA to eligible/qualified charities, including colleges, universities, and independent private schools.  This Act is now a permanent part of the U.S. tax code and is part of a larger package on other tax extenders.

To take advantage of the this extension, IRA owners need to arrange for a gift from their IRA to a qualified charity by 12/31 to count against their Required Minimum Distribution for 2015 and beyond. For our purposes, the gift is to be sent as a check to the charity directly from Covenant Trust Company.

It is important to note that not every organization dedicated to philanthropic purposes will receive qualified charitable organization status, and therefore gifts to those organizations may not be deductible even if they are tax-exempt organizations.

As the Charitable Rollover now has no expiration date, IRA owners have the ability to plan for the RMDs accordingly.

The RMD Election forms for 2016 will be reprinted to give our clients the chance to provide us with their charitable gift plan in advance.

If you any questions or comments, please leave a message for us below or contact us directly.

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