IRA Rollover Available for Two More Years: 2010 and 2011

Lincoln viewed from Bascom HallOn December 17, 2010, Congress took the following important and favorable actions with respect to the popular tax-free IRA Charitable Rollover that allows taxpayers 70½ and older to make direct tax-free transfers to charity from a qualified individual retirement account:

  1. Extends the option for making tax-free transfers to charity to December 31, 2011.
  2. Allows transfers to charity made in January of 2011 to be treated as if made in 2010, if the taxpayer elects.
  3. Provides favorable tax treatment retroactive to January 1, 2010, for direct transfers made to charity during 2010 (prior to enactment of the legislation).
  4. And any tax-free charitable transfer rollover up to $100,000 counts to satisfy the taxpayer’s minimum required distribution for that year.

Special Bonus—Give up to $200,000 (tax-free) in 2011!

You can still make a direct tax-free charitable transfer to charity from your qualified retirement plan in January of 2011 and have it count as a tax-free charitable transfer for 2010 even if you have already taken your minimum required distribution for 2010. This opportunity is only available through January 31, 2011.

What this really means: In 2011 you can actually give charity up to $200,000 tax-free from your qualified retirement plan. How? Simply make a $100,000 direct transfer before January 31, 2011, and elect to treat it as a 2010 transfer and then make another $100,000 transfer by December 31, 2011, and treat it as a 2011 transfer.

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