Heads up retirees! Sometimes better late than never is well, better late than never.
Congress has belatedly reinstated the rules for tax year 2012, which allow individuals to make transfers from their IRA to a qualified charity (QCD). The upside: The distribution is not taxable. And, of course, the corresponding down side: The charitable contribution is not deductible. So how in the world is this going to work since we are now in 2013 and retirees have already taken their 2012 RMDs? Well, that's where the magic of the "special rules" comes in. The first "special rule" allows a distribution made to an IRA owner in December of 2012 to be treated as a qualified charitable distribution when all or part of the distribution is transferred in "cash" to a qualifying charity by January 31, 2013. This is basically a "do-over" for anyone who was waiting for the prior years' QCD rules to get extended. Another "special rule" states that a taxpayer can elect to have any QCD taken in January 2013, be treated as though made on December 31, 2012. This might be a good strategy if you forgot to take your 2012 RMD. So, if you'd like to take advantage of either of these strategies, act today, as the curtain is about to fall on this opportunity.