by Kathy M. Sablone, JD, AEP®, Director of Wealth Planning


After months of debate and uncertainty, Congress made the IRA Charitable Rollover permanent at the end of 2015. Since it was first enacted in 2006, this provision had always been temporary and had to be extended by new legislation. As a result of the Tax Cuts and Jobs Act of 2017, the IRA Charitable Rollover may become a more valuable tax planning tool.

The IRA Charitable Rollover allows individuals who have reached 70 1/2 to donate up to $100,000 to charity directly from their IRA. These distributions can satisfy the required minimum distribution rules and are not treated as taxable income. Although the donor cannot take an income tax charitable deduction for the gift, the exclusion from income can be more beneficial depending on the individual’s tax situation. Now that more taxpayers will be taking the increased standard deduction and lose the benefit of itemizing charitable deductions, the opportunity to exclude part or all of their required minimum distribution from income becomes more attractive.

In order to qualify, the distribution must be made directly from the IRA to a public charity. Gifts to donor-advised funds or private foundations are not eligible. The charitable rollover can be used to satisfy an existing pledge but it can only be used for outright gifts and not to fund planned giving vehicles, such as gift annuities or charitable remainder trusts. The charitable rollover may only be made from an IRA and not from other types of retirement accounts. A donor can make more than one charitable rollover each year as long as the aggregate gifts do not exceed $100,000.

If you are considering an IRA Charitable Rollover, please contact your Boston Financial Management advisor.

Special Edition Disclaimer: This publication is for informational purposes only and should not be considered investment advice or a recommendation of any particular security, strategy or investment product. The information contained herein is the opinion of Boston Financial Management and is subject to change at any time based upon unforeseen events or market conditions.

IRS Circular 230 Disclosure: Pursuant to IRS Regulations, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax related penalties or (ii) promoting marketing or recommending to another party any transaction or matter addressed herein. 

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