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IRA Charitable Rollover Included in Final Tax Bill
Source: The NonProfit Times  ·  December 21, 2010  ·  Excerpt

Included in the Middle Class Tax Relief Act of 2010 signed by President Obama earlier this week is the provision for the IRA (Individual Retirement Account) Charitable Rollover.

The new law allows donors age 70½ to exclude from their taxable income any IRA funds up to $100,000 that have been withdrawn and transferred to a charity when filing a tax return. The IRA Charitable Rollover expired at the end of 2009 and had been in effect since 2006.

The extension also is retroactive, meaning that the tax benefits of the provision apply to any qualified donations made after Dec. 31, 2009. The extension of the IRA Charitable Rollover also includes a special provision that allows taxpayers who make any qualified donations between Dec. 31, 2010, and Feb. 1, 2011, to deem that those donations were made on Dec. 31, 2010, for tax filing purposes, according to Paulette V. Maehara, CFRE, CAE, president and CEO of the Association of Fundraising Professionals (AFP) in Alexandria, Va.

The provision is extended through Dec. 31, 2011.

Our take
Ever-changing tax laws present unique challenges for nonprofits: not only might they have an immediate impact on donors' giving habits, but they may also spur regular shifts in your organization's communication and solicitation strategies. Waiting to act until after new tax laws have been implemented will be far too late in most cases, and that's why we help our clients stay on top of tax code and help them capitalize accordingly.

Contact us now for help answering these questions and more:

  • How should my organization react to the extension of the IRA Charitable Rollover?
  • What changes in tax code are on the horizon, and is there any planning my organization can do to take advantage?


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