IRA Charitable Rollover

The Council has actively supported permanence and expansion of the IRA Charitable Rollover since its inclusion in the Pension Protection Act of 2006 (PPA). As of December 18, 2015, the IRA Charitable Rollover was passed by Congress and signed into permanent law by the President, allowing  taxpayers age 70 ½ or older to transfer up to $100,000 annually from their IRA accounts directly to charity without first having to recognize the distribution as income.

Prior to 2006, taxpayers wishing to transfer Individual Retirement Account (IRA) assets to charity first had to recognize the amount as income, make a transfer, and then claim a charitable deduction for the amount gifted. This often resulted in tax liability, even though the donor ultimately transferred the entire IRA distribution to charity. PPA partially solved this problem by allowing taxpayers age 70 ½ or older to transfer up to $100,000 annually from their IRA accounts directly to charity without first having to recognize the distribution as income. The IRA charitable rollover has proven to be very popular with taxpayers and beneficial to charities.

Despite its broad appeal, the provision remains limited in several respects: it is limited to taxpayers age 70½ or older; the amount of gifts is capped at $100,000; and donors are specifically not permitted to make charitable rollovers to donor-advised funds, supporting organizations, and private foundations. The Council strongly supports enhancing the IRA charitable rollover by dropping the age threshold and expanding the organizations eligible for transfer of the IRA distribution to donor advised funds, supporting organizations and private foundations.

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