By Alvin H. Blitz, Esq., chief gift planning officer, Masonic Charities
Our friendly folks in Washington are now considering resurrecting the IRA Charitable Rollover again. This tax provision permits an IRA owner who is age 70 1/2 or older generally to exclude from gross income up to $100,000 per year in distributions made directly from the IRA to certain public charities, which includes any of the Masonic Charities. The proposal being advanced by the Senate Finance Committee would be effective for all of 2013 and 2014.
Since the distribution given to charity is never included in income, it is especially attractive for individuals that do not itemize their deductions or have sufficient income that they do not need to use their required minimum distribution from their IRA. Furthermore, on May 28, the House Ways and Means Committee approved a similar provision to make the extension permanent. Passage of either of these provisions by Congress will probably not occur until after the November elections.
Masonic Charities’ gift planners will be monitoring these provisions throughout the year.
Estate Planning – Inheritance Tax
For Pennsylvania residents, the inheritance tax has few exemptions, and it taxes almost all assets held at death except those assets held jointly between a husband and wife and life insurance proceeds. The rates for Pennsylvania inheritance tax are as follows:
- 0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
- 4.5 percent on transfers to direct descendants and lineal heirs;
- 12 percent on transfers to siblings; and
- 15 percent on transfers to other heirs, except charitable organizations and tax exempt institutions and government entities.
Remember to update your estate plan regularly, especially if you have moved to another state or have experienced a significant family event, such as a death in the family. If you live in a state other than Pennsylvania, please check with your attorney, or Masonic Charities’ gift planners would be glad to provide information on your state’s inheritance or estate tax law.
If you would like to receive any future notifications on the enactment of proposed legislation or any other charitable giving updates, please contact the Masonic Charities’ Office of Gift Planning by visiting www.masoniccharitiespa.org.