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Examples of IRA Rollover Gifts
Partial IRA Gift
Question: Mary received her required minimum distribution of $22,000 on Dec. 5, 2012. On Jan.15, 2013, she sends a check for $3,000 to her favorite charity. Does this qualify as a 2012 qualified charitable distribution?
Answer: Under the American Taxpayer Relief Act Sec. 208(b)(2)(B), “any portion of a distribution from an individual retirement account” may be transferred to a charity before Feb.1, 2013. Therefore, a partial gift such as the $3,000 transfer by Mary IRA is permissible.
December Cash Gift
Question: Joe received a required minimum distribution of $10,000 on Dec.15, 2012. On Dec. 18, he sent a check for $10,000 to his favorite charity. Is a distribution and cash gift in December 2012 still a qualified charitable distribution?
Answer: Yes. The requirement of Sec. 208(b)(2)(B)(i) is that the cash gift be made before Feb. 1, 2013. A gift in December 2012 meets that requirement.
Nov. 28, 2012, Distribution
Question: John receives his 2012 required minimum distribution Nov. 28, 2012. He would like to transfer $10,000 of the $41,000 as a cash gift to charity in January 2013. Is there any way that this can be a qualified charitable distribution?
Answer: No. The requirement of Sec. 208(b)(2)(B) is that the distribution to the taxpayer must be made after Nov. 30, 2012. Distributions prior to Dec.1, 2012, will not qualify.
Distribution over Required Minimum Distribution
Question: Susan has a 2012 required minimum distribution of $16,000. On Dec. 18, 2012, she received a distribution from her IRA of $20,000. Can she give the full $20,000 as a qualified charitable distribution?
Answer: Yes. Sec. 208(b)(2)(B) states that “any portion of a distribution” will qualify. Therefore, any amount up to the $100,000 qualified charitable distribution limit may be transferred to charity in January 2013. It will be a 2012 qualified charitable distribution.
Prior Cash Gift
Question: James makes a cash gift to his favorite charity of $10,000 on Dec. 3, 2012. On Dec.15, 2012, he receives his $10,000 required minimum distribution from his IRA. Can this be a qualified charity distribution?
Answer: It appears that this will not qualify. Sec. 208(b)(2)(B)(i) states that “such portion is transferred in cash” for the qualified charitable deduction. It appears that “such portion” can only come from the IRA distribution. Therefore, the IRA distribution would need to be prior to the charitable cash gift.
Age 70 ½ Gift
Question: Susan was born June 30, 1942. She is 70½ on Dec. 30, 2012. On Dec. 15, 2012, Susan receives an IRA distribution of $20,000. Can she make a gift to charity in January 2013 and have a qualified charitable distribution?
Answer: Probably yes. Sec. 208(b)(2)(A) states that “any” qualified charitable distribution in January will be deemed to have an effective date of Dec. 31, 2012. Under Sec. 208(b)(2)(B), Susan makes a $20,000 gift to charity. Even though she received the distribution Dec. 15, because the cash gift is in January 2013, she is deemed to have made the qualified charitable distribution Dec. 31, 2012. Because she was age 70 ½ on Dec. 30, this should qualify.
Multiple Qualified Charitable Distributions in One Year
Question: Harry would like to make multiple qualified charitable distributions in one year. Because he thought that the IRA Charitable Rollover would be enacted for 2012, he had his custodian make a $5,000 qualified charitable distribution in October 2012. He also received an required minimum distribution for $8,000 on Dec. 5, 2012. Harry would like to give the $8,000 on Jan.15, 2013, and also add a $10,000 gift from his IRA to his favorite charity on Jan. 20, 2013. Will all three gifts be 2012 qualified charity distributions?
Answer: Yes. First, ATRA Sec. 208(a) changes the sunset date for IRC Sec. 408(d)(8) to Dec. 31, 2013. This enables 2012 qualified charitable deductions to be qualified. Second, IRC Sec. 408(d)(8)(A) states that “qualified charitable distributions” up to $100,000 in one year are permitted. The plural on “distributions” permits multiple qualified charitable distributions in one year within the $100,000 limit. Therefore, ATRA Sec. 208(b)(2)(B) states that “any portion of a distribution from an individual retirement account” may be transferred to charity before Feb. 1, 2013. The $8,000 required minimum distribution gift to his favorite charity is a 2012 qualified charitable deduction. Third, Sec. 208(b)(2)(A) states that “any” qualified charitable distribution in January will be deemed to have an effective date of Dec. 31, 2012. The $10,000 IRA charitable rollover on Jan. 20, 2013, is therefore a qualified charitable distribution with a Dec. 31, 2012, effective date. All three are permitted.
Recent Gifts Support Foundation Mission to Help UCM Students
- $250 from Giving Tuesday for general scholarships
- $50 from Giving Tuesday for nursing department
- $100 from Giving Tuesday for UCM Black Alumni Association Scholarship Endowment
- $50,000 bequest for scholarships in economics and finance
- $50,000 for Mules Football Locker Room Project
- $50,000 for scholarship for incoming freshmen from Maysville, Mo., high school
- $3,755 for Fund for Excellence