The Return of Tax-Free Charitable IRA Distributions in 2013

Once again in 2013 IRA holders will be able to make tax-free distributions from their accounts to a charitable organization of their choice.  Revived as a part of the “fiscal cliff” fix, the American Taxpayer Relief Act, (ATRA), the provision which was allowed in 2011 and expired in 2012 is back for 2013.

IRA owners will be allowed to donate $100,000 in 2013 to qualified charities.  These distributions can be used to satisfy an investor’s annual Required Minimum Distribution for the year up to the $100,000 limit.

As with so many tax provision in the past decade, tax-free charitable gifts from an IRA will expire at the end of 2013. Congress will have to act if the provision is to be extended  beyond this year.

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