 Feeding giraffes. Photo Credit: Hannah HilliardQualified Charitable Distributions
Commonly known as an "IRA charitable rollover," a qualified charitable distribution (QCD) can be made from a Roth or a traditional IRA.
There are specific rules that you must follow for this to qualify as a gift. You must be 70½ years old or older at the time of the gift. The transfer must be made directly to the charitable organization. You can give up to $100,000 per year, and your spouse can also give up to $100,000 from his or her IRA. You can make a QCD only to a public charity but not to a private foundation or a donor-advised fund.
Charitable Gift Strategy: 70½ or Older? Make a QCD Gift
There are multiple benefits of making a QCD gift. The QCD is removed from your IRA without your claiming it as income. If you have reached the age where you must take a required minimum distribution (RMD), your QCD gift can satisfy some or all of your RMD thereby reducing the amount you can be taxed on.
Recent legislation now allows for the $100,000 maximum annual QCD to be indexed for inflation beginning in 2024. It is quite simple to make a QCD. Ask your IRA administrator for their QCD form and any related procedures. |
