Financial Advisers Are Betting Tax Break on IRA Gifts to Return

The tax break on charitable donations from individual retirement accountants expired at the end of 2013, but some financial advisers are factoring it into 2014 fiscal planing in anticipation of Congress re-authorizing the deduction, The Wall Street Journal writes.

The break allowed individuals ages 70½ years and older to deduct gifts of up to $100,000 made directly from IRAs from their taxable income and count them toward required annual IRA withdrawals. It was enacted in 2006 on a two-year basis and has been regularly extended since.

While some financial planners are cautioning older clients to take a wait-and-see approach, others are backing IRA gifts, while recommending in some cases that the size of the donations be limited. “Bottom line, our firm expects Congress to extend the charitable provision,” said Rob Siegmann, chief operating officer of Financial Management Group, in Cincinnati.

Read a Chronicle of Philanthropy article on the tax outlook for nonprofits and donors in 2014.