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Extended Provision: Qualified Charitable Contributions

Included within the list of expiring provisions that Congress recently extended is a provision that permits IRA owners above age 70 ½ to make Qualified Charitable Contributions (QCC) directly from their Individual Retirement Account (IRA) and exclude from gross income up to $100,000 each year.

IRS Notice IR-2013-6, issued on January 16, provides guidance that clients have until January 31 to make these contributions and still deduct up to the $100,000 on their 2012 tax returns. A direct transfer to the QCC must be made by January 31; alternatively, if the client received an IRA distribution in December 2012, they can contribute in cash all or part of the distribution received to an eligible charity.

This extended rollover period was made to accommodate taxpayers who were contemplating making these contributions for 2012 but had to wait until Congress finally decided to extend this provision. Due to the late decision, Congress took the unusual action of extending the contribution period’s due date by one month.

Observation: It may behoove taxpayers to write “2012 Charitable Contribution  per IRS Notice IR-2013" on charitable contribution checks.

 

 

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