What is a charitable IRA rollover
or qualified charitable distribution?
Still, one would think it would follow on the coattails of the traditional IRA rollover
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.
To justify that an IRA rollover
is in the best interest of a DC plan participant, advisers will face additional compliance and operational work.
BANKING AND CREDIT NEWS-October 27, 2016-PCS launches IRA rollover
M2 EQUITYBITES-October 27, 2016-PCS launches IRA rollover
If they have changed jobs and can roll their balance to the new employer's 401(k), the advisor must also consider the costs and benefits of the new plan in addition to the benefits and limitations of an IRA rollover
Under the terms of the IRA Rollover
Law enacted in December 2015, individuals over 70/2 years of age have the opportunity each year from 2016 on to transfer any amount (up to $100,000) from an IRA to a qualified public charity free of any tax.
Additionally, an IRA rollover
will defer immediate taxation-including a possible 10% early distribution penalty-and will allow amounts to continue to be invested, and thereby grow, on a tax-deferred basis.
In March, the IRS announced it would follow the Bobrow decision but, acknowledging its contrary guidance in Publication 590, Individual Retirement Arrangements (IRAs), and never-finalized 1981 proposed regulations, said it would delay application of the aggregate limitation until 2015 (see prior Tax Matters coverage: "Rollover Contribution to Second IRA Disallowed," May 2014, page 61, and "Multiple IRA Rollover
Case Settled," July 2014, page 84).
408 that would provide that the IRA rollover
limitation applies on an aggregate basis.
This strategy for minimizing the marginal income tax rate at which the in-plan Roth IRA rollover
is taxed is also advantageous from another perspective.