If you are 70 1/2 years of age or older, we have great news! Year-end Federal legislation has made the IRA charitable rollover permanent. The new law made the legislation retroactive to Jan. 1, 2015.
Under this legislation, donors aged 70½ or older who transfer any amount up to $100,000 from their IRAs directly to qualified public charities, such as the El Cerrito Library Foundation (tax ID# 47-1112720) during 2015 (or in any subsequent year) will not have to pay income taxes on the donated money. And, the transfer counts towards the IRA required minimum distribution (RMD) for the year in which the gift is made. This may be a very good way for you to make a contribution to a safe, modern library for El Cerrito and to minimize your taxes at the same time.
Here is a quick recap of the IRA charitable rollover rules. Gifts qualify under the law if:
- The donor is age 70½ or older on the day of the gift.
- The donor transferred any amount up to $100,000 directly from the donor’s IRA to one or more qualified charities. This opportunity applies only to IRAs and not other types of retirement plans.
- The donor does not receive any goods or services in return for the rollover gift in order to qualify for tax-free treatment.