New tax provision for IRA Charitable Contributions for 2012 and 2013 | Ed Slott and Company, LLC

New tax provision for IRA Charitable Contributions for 2012 and 2013

For those who took their RMD in December 2012, they can write a check for that amount ONLY to charities during the month of January only. This does not apply to RMD's taken before December. But then, the cap of up to $100,000 will apply for year 2013.

Does this rule apply to gross amount or net after tax withholding?

Applies to gross amount. If you want to eliminate tax on your withheld amount, you can come up with other money and donate it to the charity this month and count it as a 2012 QCD on your 2012 return. There is a 100,000 gross cap for each year, so if you apply the January check to the 2012 QCD, you have another 100,000 to use for your 2013 QCD. The amount you donate of your Dec distribution used for a 2012 QCD cannot be itemized on Sch A. Note that if you satisfied your entire RMD prior to December, your QCD cannot apply to your RMD, but still would be a more tax efficient method of contributing to charity because your December distribution will not be included in your AGI when you show a QCD on line 15b of Form 1040.

Can charities made in December 2012 be used now as the 2012 QCD and thus reduce the tax on the RMD takend in December 2012

Yes. as long as the contribution to charity was made in cash and was made AFTER receiving the distribution.


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