Offset your Roth Conversion with a Charitable Deduction
Starting this year, you can convert all or some of your regular IRAs or 401(k) into a Roth IRA regardless of your income. Normally, the amount you convert to a Roth IRA is added to your income in the year of conversion. For 2010 only, you have the choice of adding it to your 2010 income or splitting it evenly between 2011 and 2012. One way to limit this tax is by earning a charitable deduction to offset the additional income you will have to declare as a result of the transfer.
Using cash, securities, or other non-IRA assets to make an outright gift or fund a charitable gift annuity or charitable remainder trust, offers you an opportunity to earn an immediate and substantial charitable deduction to offset some or all of the taxable income from your IRA conversion, to further the mission you believe in, and, if desired, to create a lifetime of payments for yourself or your loved ones. If you are planning on leaving your IRA to Cal, a Roth conversion may not be your best option. Please contact us for more information.
