Churches and Non-profit Organizations need to know about this special opportunity. Once again this year, Congress and the IRS are providing certain Individual Retirement Account owners the opportunity to make a gift to their church or favorite charity without having to declare income from that distribution.
If any of your donors have an IRA and will be 70 ½ by the end of the year, they can make a gift to their church or favorite charity without taking money out of their checking account. Any gift up to $100,000 is permissible. They must contact their IRA administrator and request that a distribution be made directly to the organization. This donation will count toward their Required Minimum Distribution.
Whatever amount is transferred will not increase the IRA owner’s taxable income, but neither will it qualify as a charitable deduction for the year. The important thing is that the distribution must be made directly from your IRA to the charity by the deadline – December 31, 2013.
This exemption has been authorized by Congress for several years. It is not a permanent law, but has been authorized for 2013.
If someone is interested in using this exemption, they should consult their tax adviser to make certain they qualify to take advantage of it. Some tax advisers have suggested IRA owners use this exemption as well as include their church or favorite charity in their estate plan. They point out that the donor will have the satisfaction of helping a favored ministry now.