• IRA Rollover

    American Taxpayer Relief Act of 2012

    The American Taxpayer Relief Act of 2012 effectively extends the charitable rollover provision for 2012 and 2013 for certain individuals.

    If you are 70½, or will be at the time of the gift, you are eligible to make a tax-free IRA charitable rollover gift to Kuyper College. If you make the gift prior to February 1, 2013, you may exclude the distribution from your Federal taxable income in either 2012 or 2013. Any gifts made after February 1, 2013, will only be excluded from Federal taxable income in 2013.

    Requirements for IRA qualified charitable distributions:  

    • Gifts are tax free up to $100,000
    • Gifts will qualify for all or part of your required minimum distribution
    • This provision will apply for 2012 and 2013
    • IRA holder must be 70½ or older at the time of gift
    • Gifts must be an outright gift to a charitable organization
    • Gifts may only be made from traditional IRAs and Roth IRAs

    Special Requirement
    Given the fact that Congress did not pass this legislation until after the end of the year, there is a provision for people who waited until December, 2012 to take their IRA Required Minimum Distribution, hoping Congress would pass the law earlier. This special provision allows you to treat that IRA withdrawal as a qualified charitable distribution if you forward the distribution to a qualified charity prior to February 1, 2013. If you took your IRA withdrawal in December 2012, and are interested in making a tax-free gift, we encourage you to speak with your tax professional or a Kuyper representative at 1-877-229-0940 or kcapisciolto@kuyper.edu.

    Below you will find different scenarios of how this new law may affect different situations. Click on each one to read more.

    Scenario 1 – direct distribution to charity made in 2012
    John is 71 years old. During 2012, John had his IRA manager send $15,000 directly from his IRA to a qualifying charity. May John exclude the $15,000 distribution from his Federal taxable income for 2012? Yes.
    Scenario 2 – direct distribution to charity made in January 2013
    It is January 15, 2013, and 71 year old John wishes to make a distribution directly from his IRA and have the amount excluded from his Federal taxable income for 2012. Is it too late? No. John can have his IRA manager send a distribution directly to a qualified charity and as long as the amount does not exceed $100,000 and is received at the charity by February 1, 2013, John will be able to exclude the distribution amount from his 2012 Federal taxable income.
    Scenario 3 – distribution taken by individual in December 2012
    John is 71 years old and took a $10,000 distribution from his IRA in December of 2012. May he now make a cash gift to his favorite charity and exclude the amount from his Federal taxable income of 2012? Yes, if he makes the donation no later than February 1, 2013. (Note that the “cash” distribution clause in the ACT applies only and up to those amounts received by the donor from his IRA in December of 2012.)
    Scenario 4 – direct distribution to charity in February 2013
    John is 71 years old and is having his IRA manager send a check directly to his favorite charity on February 2, 2013. Will this distribution be reflected in John’s 2012 tax return? No, it will have to be reflected in his 2013 return.
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