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Charitable pledges, inherited IRAs and charitable IRA distributions

If you are over 70½ and have outstanding charitable pledges, you can now use qualifying charitable distributions from your Individual Retirement Account (IRA) to satisfy your pledges. The Department of Labor has advised Treasury and the IRS that a direct contribution from your IRA to a charity is not a prohibited transaction under of the Internal Revenue Code, even if the contribution is used to satisfy an existing charitable pledge.

In another favorable development, the IRS confirmed that the beneficiary of aninherited IRA who is over 70½ can make a qualified charitable distribution directly from his or her inherited IRA.

If you have any outstanding charitable pledges, a qualifying charitable distribution from your IRA is a great way to receive your required minimum distribution tax free and satisfy your outstanding charitable commitments.

You can also make the charitable distributions from your inherited IRA. Remember, your total charitable distributions from your IRAs are limited to $100,000, and can only be made this year. However, both you and your spouse can each make $100,000 distributions.

  • Partner

    John is Chair of the firm's Estate Planning Department. He also leads the firm's Senior Partner Committee, and is a member of the firm's Finance Committee. John, a former Certified Public Accountant, began his career in the tax ...

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