With Age Comes Rewards

In case you missed it, the “Fiscal-Cliff Legislation” that was passed on January 2nd offers retirees over age 70 ½ a chance to make gifts to charities in a unique way.  I’m sure that you, your parents or your grandparents have dealt with the Required Minimum Distribution rules from an IRA once you get past the magical age of 70 ½.  What that means is, even though you may not need the money, you have to take a taxable distribution from your IRA, based on a formula for your particular age.  Now, for 2013, you can elect to transfer up to $100,000 from your IRA directly to a charity as a tax-free “Qualified Charitable Distribution”.

One of our generous clients incorporated this strategy into his giving plan and has already given away the maximum QCD amount of $100,000 this year.  He loves it that he will not have to list this transfer as income on his 2013 tax return.  Furthermore, the amount that he transferred satisfied his Required Minimum Distribution!  The secret to processing this transaction was that the money was transferred directly to his charity from his investment custodian.  This strategy is available to you until 12/31/2013.  This isn’t the first year Congress has allowed for this, but it may not come around again.  So, if you or someone you love is over 70 ½ and has an IRA and is charitably inclined, this is a slam-dunk strategy for 2013.  We’ve enjoyed helping several clients implement this strategy already this year and we’re happy to help you too!

< Back to Updates