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Using the IRA Charitable Contribution Exclusion

Last update on: Jun 01 2020

In the latest tax law Congress made permanent the special provision for charitable gifts from IRAs by those age 70 1/2 or older. This article gives the basic rules and also explains when it is a good idea to use the strategy and when it isn’t. This article gives some tips on how to increase the value and effectiveness of your charitable gifts.

There is only one reason NOT to take advantage of the exclusion for IRA charitable contribution if you otherwise qualify and want to make a direct gift to charity. That would be where you could save even more tax on your charitable contribution by making a gift of appreciated long-term capital gains property. If you are in the highest federal income tax bracket and you have zero basis stock that you would otherwise sell, you can save the 25% federal income tax on the long-term capital gain. This is in addition to the benefit of the income tax deduction for full fair market value of the charitable contribution.



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