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Charitable IRA Rollover

January 06, 2016

You can save additional taxes by making your charitable contributions directly from your IRA as "Charitable IRA Rollover." 

The provision provides a possible tax saving opportunity for individuals 70 1/2 or older who must take minimum IRA distributions, but do not need the additional income.

If you made a gift from your IRA on or after January 1, 2015, that meets the requirements of an IRA charitable rollover, then the amount distributed from the IRA to the charity qualifies as a tax-free distribution and will not be included in AGI, which could save additional taxes if you are in the AGI range of  the 3.8 percent Medicare surtax. This strategy can also be used for 2016.


The Protecting Americans from Tax Hikes (PATH) Act of 2015 has permanently extended the benefits of the IRA charitable rollover provision. These benefits are retroactive to January 1, 2015.

From now on, taxpayers 70 1/2 or older can make an IRA transfer of up to $100,000 directly to charity and claim it as a tax-free IRA Charitable Rollover gift.

To qualify as an IRA Charitable Rollover gift, donors must meet several conditions:

  • The IRA account holder must be at least age 70 1/2 at the time the distribution is made to charity
  • The IRA distribution must be made as an outright gift (not to exceed $100,000) and must be made directly from the IRA custodian to the charity.
  • Distributions cannot be used to fund a gift annuity or charitable remainder unitrust, and can only be directed from a traditional IRA or Roth IRA (not from a retirement plan such as a 401(k), 403(b), etc.
  • Distributions cannot be made to a donor advised fund or supporting organization (including most private foundations). No goods or services can be received by the donor in exchange for the gift.
  • Those who wish to make charitable gifts in excess of 50 percent of their adjusted gross income (AGI)
  • Those who do not itemize deductions
Please contact me to discuss the specific requirements which must be followed in order to qualify as a Charitable IRA rollover.