(Owners of traditional IRAs have to start taking distributions from their accounts after age 70½, or face a tax penalty.) For charitably minded IRA owners, this is often a highly tax-efficient move. For example, the benefit is available only for donations of IRA assets, not 401(k) assets, and the donation must bypass the owner and go directly from the IRA sponsor to the charity. In addition, IRA sponsors don’t have to include IRA donations on the 1099-R tax form, so donors must remember them when gathering tax documents. Finally, donors who have highly appreciated investments held longer than a year in a taxable account may reap more benefits by donating them instead of IRA assets, so it’s important to evaluate alternate strategies.

Source: Wall Street Journal February 06, 2017 03:11 UTC