IRA and SEP/IRA
Under the Pension Protection Act of 2006 an individual can make a charitable contribution from their IRA. Does the same rule cover SEP/IRAs?
Under the Pension Protection Act of 2006 an individual can make a charitable contribution from their IRA. Does the same rule cover SEP/IRAs?
Permalink Submitted by Alan Spross on Wed, 2007-10-17 00:32
No, the provision does not apply to SEP or SIMPLE IRA accounts, as the QCD provision of the PPA excepts IRAs under subsections k and p of Sec 408. k and p are respective sections for SEPs and SIMPLEs.
However, a transfer from the SEP to a TIRA can be made and the QCD distribution then made from the TIRA.
Permalink Submitted by Tom Rogers on Wed, 2007-10-17 05:48
You better get moving on this quickly because the provision in the code for qualified charitable distributions from your IRA’s expires December 31,2007 .
Permalink Submitted by Alan Spross on Thu, 2007-10-18 19:28
CORRECTION:
Notice 2007-7 clarified the original PPA with respect to SEP and SIMPLE IRAs that are not “on-going”. See the att’d from 2007-7:
Q-36. Is the exclusion for qualified charitable distributions available for distributions from any type of IRA?
A-36. Generally, the exclusion for qualified charitable distributions is available for distributions from any type of IRA (including a Roth IRA described in § 408A and a deemed IRA described in § 408(q)) that is neither an ongoing SEP IRA described in § 408(k) nor an ongoing SIMPLE IRA described in § 408(p). For this purpose, a SEP IRA or a SIMPLE IRA is treated as ongoing if it is maintained under an employer arrangement under which an employer contribution is made for the plan year ending with or within the IRA owner’s taxable year in which the charitable contributions would be made.