Estate Planning Attorney Kavesh Minor & Otis

As part of the “fiscal cliff” deal, Congress has resurrected a popular tax-law provision, known as the “IRA charitable rollover,” that had expired at the end of 2011. The rule allows many investors 70½ or older to transfer as much as $100,000 a year from an individual retirement account directly to a qualified charity without having to count any of that transfer as taxable income.

Tax law and sausage. Two things you should never watch while being made. However, the recent tax law contains at least one healthy ingredient: the IRA Charitable Rollover.

This may not be a new revelation, but it bears repeating. It is just that good. The reinstitution of the IRA Charitable Rollover will benefit many qualifying taxpayers and their favorite charities alike. An article in The Wall Street Journal titled “IRA Charitable Rollover Is Back” provided an excellent, brief summary of the practical points you should know.

Until the end of 2011, you could “rollover” the required minimum distribution (RMD) from your IRA directly into the charity of your choice. Consequently, you avoided income taxation on that amount. But what about tax year 2012? Until the American Taxpayer Relief Act (ATRA) was passed on January 1, 2013, and subsequently signed into law the next day, this opportunity for 2012 did not exist. It had expired.

Now that ATRA is law, however, if you are age 70 ½ or older you can once more kill two birds with one stone and rollover funds from your IRA directly to a charity for 2012. That’s right, there is a limited window open to go back to 2012 (figuratively speaking) and make a qualifying charitable rollover from your IRA.

As noted in the article cited above, taxpayers who took their RMDs late in December while awaiting resolution of the “fiscal cliff” debacle may still re-characterize that withdrawal into a rollover if they act now! However, this opportunity expires at the end of this month.

For more information please visit my estate planning website.

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If you need to speak with an experienced estate planning lawyer please contact us online or call us directly at 800.756.5596 to first register for one of our free, informative seminars. Your attendance will qualify you for a special discount for our estate planning services should you decide to make a free appointment at the conclusion of the seminar and choose to proceed with us. We proudly serve clients throughout California with offices in Torrance, Newport Beach, Orange, Woodland Hills and Pasadena.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
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