ACGA Requests Senate Amend Charitable IRA Rollover Provision

ACGA Requests Senate Amend Charitable IRA Rollover Provision

News story posted in Legislative on 14 December 2010| comments
audience: National Publication | last updated: 18 May 2011
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Summary

Writing on behalf of the American Council on Gift Annuities, attorney Conrad Teitell has requested the Senate amend H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, to better enable taxpayers to take advantage of bill provisions dealing with charitable IRA rollovers.

Full Text:

Honorable Congressional Leaders and Exhausted Staff:

As volunteer legal counsel to the American Council on Gift Annuities (ACGA), I write this letter requesting an addition to Sec. 725 of H.R. 4853 of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

Since 1987, ACGA — with over 1200 sponsoring charitable organizations — has been dedicated to both protecting donors and assuring that charities at the end of the day will have gifts to further their missions.

As an invited witness before the Senate Finance Committee on November 14, 2007, I testified on the importance of the IRA/charitable rollover and H.R. 4853 extends that provision for 2010 and 2011.

However, recognizing that the bill will be enacted at the end of 2010 and thus too late for virtually all taxpayers to use their IRAs to make charitable gifts in 2010, the bill allows a taxpayer who makes a qualified rollover to charity in January 2011 to elect to have it treated as if made on December 31, 2010.

Unfortunately, that laudable provision is meaningless for virtually all taxpayers who have already taken their minimum required distributions (MRD) for 2010. To be a qualified distribution, the MRD must have been paid directly to charity. And because the rollover provision was not in effect when the MRD was taken, it was paid to the taxpayer and not to the charity.

To rectify this situation, ACGA asks that Sec. 725 of H.R. 4853 be amended to also provide that a taxpayer who makes a direct cash gift to a qualified charity in January 2011 be able to elect to have that gift be deemed to be a gift from his or her minimum required distribution taken in 2010 and thus to the extent so elected will not be a taxable minimum required distribution to the taxpayer on his or her 2010 income tax return.

We ask that this change be made on the bill now before the Senate, in the bill that the House will pass and that it will be included in the bill that emerges from the House-Senate conference.

Respectfully,

Conrad Teitell

Chairman, Charitable Planning Group

Cummings & Lockwood LLC

Six Landmark Square

Stamford, CT 06901

Phone: 203-351-4164

Right Fax: 203-708-3840

Cell: (203) 273-8783

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