Who should take advantage of the IRA charitable rollover?

If you or someone in your family could qualify to make a charitable IRA rollover, should it be considered? Here are some of the situations in which this tax break could be beneficial.

* You have to take the RMD, but you don’t need the money and you don’t want to pay tax on the distribution.

* You want to give to charity, but you don’t itemize deductions so any contribution you make would not be tax-deductible.

* You do itemize deductions, but your charitable contribution deduction would be affected by the 50% / 30% of AGI limit.

* Having to include your RMD in income would result in the phasing out of other deductions and credits based on adjusted gross income.

The charitable IRA rollover is a powerful tool for tax planning. But remember, as it now stands, this provision will expire December 31, 2011. Give us a call if you would like to analyze whether this option makes tax sense for you or a family member.

David Bradsher, CPA