The Treasury Department and the Internal Revenue Service issued a notice providing extensive guidance on several Pension Protection Act rules relating to distributions from tax-qualified retirement plans. The guidance addresses many questions on the law’s provisions, including:
The notice also clarifies several issues concerning the provision permitting IRA owners age 70-1/2 or older to directly transfer tax-free, up to $100,000 per year to an eligible charity. For example, a check from an IRA made payable to an eligible charity but delivered by the IRA holder still qualifies for tax-free treatment. IRAs held on behalf of beneficiaries, as well as IRAs held by the original owners, are eligible to use this provision.Additionally, the $100,000 annual limit applies separately for each spouse of a married couple. If both spouses have IRAs and are at least age 70-1/2 or older, the couple can transfer a combined total of $200,000. Separately, the IRS Office of Chief Counsel is reviving its professor-in-residence program. Dormant since the late 1980s, the program provides some of the nation’s top legal academicians the opportunity to contribute to the development of legal tax policy and administration.
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