Can anyone recommend a web site that has the details on how gifting thru the trustees of an IRA will work out in filling out tax forms? I couldn't find much help on the irs.gov web site when keying in the Pension Act of 2006.
-- Jim Chapman
I haven't seen anything yet, but it's really not important until it's time to prepare the return. There's no particular reason why anything will have to be reported on the taxpayer's return since all the information would be available through third-party reporting. Something akin to Roth contributions. The important procedural thing for the taxpayer at this point is to make sure that the gift goes directly from the IRA custodian to the charity.
-- Phil Marti Clarksburg, MD
Interesting timing. I brought this topic (The IRA direct gifting) up on the unmoderated group to little fanfare. I trusted that the target audience was pretty limited, those who were over 70-1/2, had IRAs, did not itemize, and made charitable donations, but hadn't made them yet for 06. I noted that I was advising a woman who had all the above in her favor, telling me that she had a $2000 intended 06 donation as we sat to review her year end numbers. I had a long conversation with a Charles Schwab service person who had the same comment for me. That the forms weren't out yet. I am trusting that since the law was signed and in effect, that the 2006 tax forms will have a place to show one's RMD, and then account for the reduction for the donation. Schwab will take the donation amount and make the check payable to the charity but mail it to my client. She'll send it on to the charity. I imagine that as with any of these changes, the forms will be available by end of January, no need to panic. JOE
I work for a 501(c)3 organization and recently attended a tax conference where this was a topic. The IRS representative said there would be specifics in the 1040 instructions. You must get a tax receipt and may not receive any quid pro quo benefits from the deduction. The limit is $100,000 and the deal is good for only 2006 and 2007. The taxpayer does not recognize income and does not get a deduction, so although the transaction is permitted for both regular and Roth IRAs it would not be beneficial to the taxpayer to use a Roth. This type of transaction will qualify towards the minimum distribution.
-Crystal
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