UM Foundation Advisor: American Taxpayer Relief Act

Great news! Congress has recently enacted the American Taxpayer Relief Act of 2012, and President Obama will be signing it into law shortly. The Act includes a one year resurrection (for 2013) of the IRA "charitable rollover." The IRA charitable rollover permits people who have IRAs to have the IRA trustee or custodian directly distribute up to $100,000 to a qualified charitable organization like the UM Foundation without having to first take the distribution as personal income.

There are two special, very limited opportunities in the Act for making charitable contributions of IRA funds during January 2013.

The first opportunity is for IRA account holders to make a rollover to a qualified charity in the month of January 2013 and treat it as having been made in 2012. This opportunity effectively allows IRA account holders to make two qualified charitable rollovers in 2013, because you can also make another charitable rollover for 2013.

The second opportunity is for people who took distributions from their IRAs after November 30, 2012 and before January 1, 2013. These people can treat their distributions as having been made to charity if they give that money to a qualified charity before February 1.

In other words, you could avoid having your IRA distribution counted as income (for up to $100,000) even though the distribution occurred in December 2012. This will help you avoid the income tax penalty as long as you pay that money to a qualified charity before February 1, 2013.

It is imperative that you act now in order to take advantage of these opportunities. If you have any questions, please contact Paul Hood, director of gift planning, toll-free at 800.443.2593 or via e-mail at [email protected].