This summer, a new law was passed that allows those over 70.5 years old to give up to $100,000.00 directly from their IRA account to charity. This is called a "charitable rollover."
Here’s a quick breakdown of what you need to know about this:
1. It only applies to those over age 70.5.
2. It only applies to IRA accounts (not a 401k, 403b, SEP, profit sharing or pensions). If your money is in one of those type of accounts you can roll over your funds to an IRA, then donate.
3. DO: Donations must go straight to the charity (not to a donor advised fund or foundation). DON’T: You cannot get a check from your IRA then give it to the charity.
4. The donated funds can’t be deducted as a charitable donation on the giver’s tax return. However, the money given to the charity from the IRA is not included as income.
Charities are very happy with this new provision and it can be a great way to reduce your estate and benefit your favorite charity. For more detail.