Older IRA owners face charity distribution deadlines

Utahns who own an IRA, or individual retirement arrangement, have only a limited time left to make tax-free transfers to eligible charities and make them count for tax-year 2012, according to the Internal Revenue Service.

IRA owners age 70½ or older have until Thursday, Jan. 31, to make a direct transfer, or alternatively, if they received IRA distributions during December 2012, to contribute, in cash, part or all of the amounts they received to an eligible charity.

The American Taxpayer Relief Act of 2012, enacted Jan. 2, extended for 2012 and 2013 the provision that allowed IRA owners to exclude from their gross income up to $100,000 of "qualified charitable distributions," or QCDs. First available in 2006, this provision had expired at the end of 2011.

For tax-year 2012 only, IRA owners can choose to report QCDs made in January 2013 as if they occurred in 2012. In addition, IRA owners who received IRA distributions during December 2012 can contribute, in cash, part or all of the amounts distributed to eligible charities during January 2013 and have them count as 2012 QCDs.

The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A, the IRS said.

They are reported on Form 1040. Transferred amounts are not taxable and no deduction is available for the transfer. QCDs are counted in determining whether the IRA owner has met his or her IRA required minimum distributions for the year.

QCDs are reported on Form 1040 on Line 15. The full amount of the QCD is shown on Line 15a. Do not enter any of these amounts on Line 15b but write "QCD" next to that line. Further details can be found at http://1.usa.gov/W5HJwE.