If an individual taxpayer receives a distribution from an IRA, and then contributes all or part of the amount distributed to a charity, that individual must include the taxable part of that distribution in her gross income.While the distributee is entitled to a charitable deduction for the amount contributed, this will reduce taxable income only if she itemizes deductions, instead of claiming the standard deduction. Even if an individual itemizes, the amount deductible may be less than the amount contributed because:
* The total amount contributed to charity is limited to a specified percentage of the individual's adjusted gross income computed without regard to any net operating loss carryback, e.g. 50 percent in the case of contributions to public charities, certain governmental units, and private foundations other than private non-operating foundations.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access