Until the end of the year, certain taxpayers aged 70½ or older may transfer up to $100,000 from their IRA account to an eligible charitable organization. Such distributions may be counted toward their required minimum distributions, but are not reported as taxable income to the owner of the IRA. Employer-sponsored plans, such as SIMPLE IRAS and SEP Plans are not eligible.
Previously scheduled to expire in 2009, this valuable charitable gifting technique for wealthy clients was extended through 2011, so it will soon expire. Financial planners and advisors can learn more about this planning technique, with an illustration of how this strategy can result in significant tax savings and a boost in the size of the charitable gift, by clicking here to read an interesting article. The IRS publication outlining the rules for making such charitable transfers can be viewed here.