Seniors get additional time to make 2010 IRA charitable rollovers

The legislation that extended Bush-era tax cuts included some pension protection measures that allow older Americans to make IRA charitable rollover contributions for 2010 through the end of this month. In a victory for not-for-profits, the bill extends through 2011 incentives that were first laid out in the 2006 Pension Protection Act. Since the measure was passed so close to the end of 2010, lawmakers agreed to allow charitable rollovers that are made in January to be treated as if they were made on Dec. 31, said Michele McKinnon, a securities lawyer and partner at McGuireWoods LLP. Those who are required to take an individual retirement account deduction because they are 70½ or over — but who don't want to add to their taxable income — will gain from the extension, she said. Since the charitable rollover does not count as gross income, there is no adverse tax consequences to the donation, Ms. McKinnon said. The rule allows seniors to donate up to $100,000 from their IRAs to most public charities (not including donor-advised funds or private foundations). While qualified contributions may be counted toward the minimum required distribution for a donor's IRA accounts, they do not qualify as deductions against income.