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Changes in IRA Charitable Rollover for 2012 and 2013

Eligibility: Donors age 70.5 or older

Annual Cap: Up to $100,000 in any one year (does not all have to go to one organization)

Eligible Organizations: Charitable contributions from an IRA must go directly to a public charity (but not to supporting organizations, charitable trusts, donor advised funds or to fund a gift annuity) and they must be made payable to the charity .  Eligible donations made directly to the Montefiore Foundation will meet this criteria.

Eligible Retirement Accounts: Distributions may be made only from IRAs or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans and other retirement plans are ineligible for the tax-free treatment.

No Gifts in Return: In order to qualify for tax-free treatment, donors can not receive any goods or services in return for IRA charitable rollover contributions.

Written Receipt: Donors must receive written substantiation of each IRA rollover contribution from each recipient charity.

Special Circumstances for 2012/2013: Congress recognized issues with the late extension and provided two special transition rules– 1) Qualified distributions made before February 1, 2013 may be counted retroactively for the 2012 tax year, 2) A taxpayer who took a distribution from an IRA in December 2012 may make a contribution to a qualified charity before February 1, 2013 and treat this as if it was a direct transfer.

If you have any questions about these changes, call Debbie Rothschild, director of The Montefiore Foundation, at 216.910.2633 or your tax advisor.