IRA Qualified Charitable Distribution

By Peter Sweetser

It’s remarkable how generous Americans are in donating money to countless charities in our communities. It’s also nice when these contributions are not taxed. An IRA Qualified Charitable Distribution (or IRA Charitable Rollover) is an alternative way you can also give to your favorite charity without paying income tax.

Here’s how it works. First, to be eligible, the account holder or beneficiary must be at least 70½ years old. Second, a qualified charitable distribution can only be made from a Traditional or Roth IRA. Third, each individual can donate up to $100,000 per year to one or more qualified charitable organizations.

Unlike a typical IRA distribution, no income tax is paid. Please note – the taxpayer cannot take the contribution as a charitable deduction on their Federal Income Tax return. However, the donation can be counted as all or a portion of one’s IRA required minimum distribution. Additionally, if there is any uncertainty, it’s a good idea to confirm with the organization that it is qualified to accept charitable contributions for tax purposes.

There are more details to think about so please call me at 800-453-4392, option 2 or e-mail sweetser@famfunds.com to see if an IRA qualified charitable distribution is right for you. As always, I recommend including your accountant or tax preparer in the final decision.

Please see Fenimore disclosure.