The Pension Protection Act of 2006 (PPA) permitted individuals to roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. While this initial provision expired on December 31, 2007, it has been extended several times. On December 18, 2015 the President signed the PATH Act making this special IRA Charitable Rollover Provision permanent. This means that friends who are age 70½ or older may use their IRAs to make a gift of up to $100,000 per year to charity that may be excluded from the individual’s gross income.
This now permanent provision may be most useful for donors who do not need the additional income but must make a required minimum withdrawal from their IRA for the year; who have exceeded their charitable deduction limit; who do not itemize their deductions; or for whom additional income will cause more of their Social Security income to be taxed. Please consult with your tax advisor to determine how this provision may affect your particular situation and about the best ways to take advantage of this giving opportunity.