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Policy Issue: IRA Charitable Rollover

Publication date: 
May, 2019
IRA Charitable Rollover

Prior to 2006, taxpayers wishing to transfer Individual Retirement Account (IRA) assets to charity first had to recognize the amount as income, make a transfer, and then claim a charitable deduction for the amount gifted. This often resulted in tax liability, even though the donor ultimately transferred the entire IRA distribution to charity. The Pension Protection Act of 2006 (PPA) partially solved this problem by allowing taxpayers age 70 ½ or older to transfer up to $100,000 annually from their IRA accounts directly to charity without first having to recognize the distribution as income. More information on this issue is available from the Council on Foundations

Forum’s Policy Position

United Philanthropy Forum supports permanently extending the IRA charitable rollover by dropping the age threshold and expanding the IRA charitable rollover to include donor-advised funds and private foundations as eligible charities. 

Legislation in the 116th Congress

Charities Helping Americans Regularly Throughout the Year (CHARITY) Act (S. 1475)

  • Senators Bob Casey (D-PA) and John Thune (R-SD) reintroduced the bipartisan Charities Helping Americans Regularly Throughout the Year (CHARITY) Act.
  • The CHARITY Act would make donor-advised funds an eligible charity for purposes of the IRA rollover law that permits an IRA owner at least 70-and-a-half-years old to exclude from his or her gross income up to $100,000 per year in distributions made directly from the IRA to certain public charities. 

  • In addition, the charity act would simplify how foundations are required to calculate the federal excise tax imposed on investment income, require the Treasury Department to adopt regulations that align the simplified standard mileage tax deduction rate with the mileage rate that applies for medical and moving purposes, and promote transparency by requiring nonprofits to file their annual returns electronically.

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