As individuals and businesses rush to make charitable contributions at this busy time of year, the IRS has issued several tips as reminders of tax law provisions that have taken effect in recent years.
These touch on transfers that older IRA owners can make, donations of clothing and household items, monetary donations and a grab bag of things to keep in mind for different kinds of giving.
Special Charitable Contributions for Certain IRA Owners
An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option is available for distributions from IRAs, regardless of whether the owners itemize their deductions.
To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the transfer.
Not all charities are eligible, including donor-advised funds and supporting. Distributions from employer-sponsored retirement plans are not eligible.
Created in 2006, this provision expires at the end of 2011.
Further information is available in Publication 590, Individual Retirement Arrangements.