Charitable Giving Made Easy With Your IRA

As we exit the Thanksgiving holiday and get ready to enter the Christmas seasoning it is a great time to talk about charitable giving. When people ask what will I give, what can I give or what gives me the best tax advantage, there is one easy answer. In December 2015 the charitable IRA rollover was passed as a permanent law allowing individuals age 70-1/2 and older to transfer up to $100,000 annually from their IRA directly to a charitable organization. The good news is that the distribution from the IRA directly to the charity is a tax-free distribution to the giver and the receiver. On top of that, the distribution from the IRA will qualify for all or a part of the individual’s required minimum distribution. In order for this to be a valid charitable gift, it must be made directly to the charity. The funds cannot be withdrawn by the IRA owner or deposited into his or her account and made as a subsequent gift. Additionally, the gift may be made by both spouses from their respective IRAs. As we enter into the holiday season, now is a good time to look at your required minimum distribution and decide if it would be a good gift to a local charity of your choice.