Fiscal-Cliff Bill Brings Good News
Fiscal-Cliff Bill Restores Tax-Free IRA Distributions
If you are 70½ or older and care about the work of the Franciscans, we have good news for you. The fiscal-cliff bill, known as the American Taxpayer Relief Act of 2012 (ATRA), restores your ability to make tax-free transfers of IRA distributions up to $100,000 in 2013 and retroactively in 2012.
Here are four types of IRA donors affected positively by ATRA:
1.Those who in 2012 made Qualified Charitable Distributions directly from their IRA to charities with the hope that the law would make their distribution tax-free retroactively. If you did so, you guessed correctly. Your 2012 qualified charitable distribution from your IRA is tax-free retroactive to January 1, 2012.
2.Those who did not make a qualified tax-free IRA distribution to a charity in 2012 can do so during January of 2013. As long as you complete the distribution before February 1, 2013, your IRA will be considered a tax-free event in 2012.
3.Those who received their IRA required minimum distribution in December, 2012, may make the December distribution partially or completely tax-free by making a cash gift to the Franciscans during January of 2013, or using a December 2012 cash gift made after they received their required minimum IRA distribution, to lower or eliminate the tax on the December Required Minimum Distribution. The cash gift must be made before February 1, 2013.
4.In 2013, ATRA allows tax-free distributions up to $100,000 from IRAs to charity until December 31, 2013. The same rules in force since 2006 to qualify your IRA transfer as tax-free apply: You must be at least 70 ½ at the time of the transfer, the transfer must be made directly by your IRA custodian, the tax-free transfer cannot exceed $100,000.
If you fall into any of these four categories, we encourage you talk with your tax adviser soon.
Br. Colin King, OFM, and Br. Richard Goodin, OFM, on a recent mission trip to Jamaica.
For help with any of your questions about supporting the Franciscans, you may call Colleen Cushard, at 513-721-4700 or ccushard@franciscan.org.
Colleen is the Co-director of Friar Works, Franciscan Ministry & Mission.
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