There is no guarantee it will be extended; most likely won’t even be addressed until later into 2012.
Actually, this is good news for major gift fundraisers and planned giving programs. Don’t forget to let your donors and prospects know that their chances of using this very helpful provision are soon to end. Deadlines are always great incentives to act – just get out the word that this opportunity is expiring (at least for now).
Here are the relevate points to remember about the Charitable IRA Rollover provision:
- It only applies to donors who have actually reached age 70.5 (not those who are about to turn 70.5 this year – they have to wait until they reach the magic date to request the transfer!);
- It only applies to standard IRA accounts (it technically works with Roths, too, but you should advise your donors against using Roths for this purpose);
- It only allows eligible individuals to send $100,000 in total to qualified nonprofits in a year (if exceeded, the IRS would have to tax any gifts over the limit);
- It DOES count against your donors’ Required Minimum Distributions (RMDs) so this is clearly a chance for individuals to avoid income taxes on not needed RMDs.
- The IRA funds must go directly to the nonprofit (IRA custodians should have forms for this purpose);
- Donors don’t receive a new tax deduction – rather, the fact that they are not paying income taxes on the “withdrawal” is actually better than a standard charitable deduction. Toss in that it counts for RMD purposes, it is really a great opportunity for tax savings and significant gifts to charity.
With the President running around the country touting his Jobs thing (which happens to damages charities by messing with itemized deductions for high net income earners), and the Republicans also getting into full campaign mode (with the focus on unseating the President), I can confidently say the Charitable IRA Rollover is in serious jeopordy. At least for 2012.
So, use or lose it (at least that is the sell fundraisers should be putting out there before the end of the year).