Details of the IRA Charitable Rollover

The IRA charitable rollover is a provision that was made in order to allow people to donate money from their IRAs to qualified charities. Here are the basics of the IRA charitable rollover.

With this provision, you can donate a certain portion of your retirement funds to a charity. Currently, in 2010, you can give away as much as $100,000 of your IRA funds. When you do this, you are not going to have to pay any taxes on the money that is withdrawn from your account. In the past, you had to count this money as taxable income, and then you would have to pay income taxes on it at your marginal tax rate. Thanks to the IRA charitable rollover, this is no longer an issue.

With this type of charitable rollover, there are a few potential problems that you could run into. For example, if you do not donate the money to a qualified charity--but to some other type of organization--you are potentially going to have to pay taxes on the money. Therefore, before you choose a charity to work with, you are going to want to make sure that it fits the IRS's requirements for this program. 

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