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Qualified Charitable Distributions – A Tax Savings Opportunity 

posted by Katie Slade on Thursday, December 8, 2016

Qualified Charitable Distributions are now a permanent part of the tax code as a result of legislation passed by Congress a year ago.  We will give you a quick idea of how this charitable giving tool could benefit you.* 

If you are over 70 1/2 years old, you are allowed to give up to $100,000 annually to a qualified charity directly from your individual retirement account (IRA). Why is this beneficial? The Qualified Charitable Distribution qualifies as a non-taxable distribution.  While you will not receive a charitable gift tax deduction, the distribution will count toward your required minimum distribution without increasing your adjusted gross income. 

Most significantly, you will be helping an organization that you care about, like The Exceptional Persons Foundation, by providing financial resources that will enable it to better achieve its mission. 

  

For a gift to fully count as a Qualified Charitable Distribution, the following factors must be satisfied:

  1. You must be at least age 70 1/2 when the gift distribution is made.
  2. The distribution must come from an IRA (Traditional, Inherited or Roth).  Employer sponsored plans do not qualify.
  3. You will need to submit a distribution request letter to your IRA administrator.
  4. The distribution must transfer directly to a qualified charity.  The Exceptional Persons Foundation and other 501(c)(3) organizations qualify.
  5. You must receive a confirmation letter from the charity.  The letter must state that no goods or services were received in exchange for the gift.

Now is a great time to talk to your financial professionals to find out if Qualified Charitable Distributions are right for you. 

*This information should not be viewed as financial/tax advice, please consult your financial advisor for details. 

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