Charitable Gifts from IRAs

Senior IRA owners had a special tax rule for charitable contributions the last few years. A transfer directly to a charity from an IRA owned by someone 70½ or older wasn’t included in the owner’s gross income. There was no deduction, either. The provision expired at the end of 2009.

Congress plans to extend this and other provisions at least through the end of 2010. The bill hasn’t passed Congress, however. It is likely to be enacted in September of October, but we can’t be sure. Until it is enacted, you have to assume any contribution from your IRA must be included in gross income and you’ll receive an offsetting deduction. After it’s enacted, the 2009 rule will apply to all IRA charitable gifts in 2010.

RW September 2010