Qualified Charitable Distributions

Qualified Charitable Distributions

If you are an IRA owner, the IRS requires that you withdraw a minimum amount (RMD) from your IRA each year after your required beginning date. However, there are some IRA owners who may not need the money or don’t want an RMD to push them into a higher tax bracket.

Is there an option for unwanted RMDs? For some IRA owners the answer is yes! The IRS allows certain IRA owners to request a Qualified Charitable Distribution (QCD).

Under the QCD provision, individual IRA owners over the age of 70½ are permitted to exclude up to $100,000 from their gross income. This distribution, however, must be paid directly to a qualified charity from their individual retirement accounts (excluding SEP or SIMPLE IRAs). This option may also be utilized by owners of an inherited IRA, but all of the rules still apply including the requirement that the individual inherited IRA owner be at least age 70½.

The QCD option was just made permanent in late December of 2015.

Source: www.irs.gov

More Updates

IMPORTANT TRUST DEADLINE APPROACHING

For trusts that inherited an IRA in 2019, an important deadline is approaching. The due date to provide required trust documentation to the IRA custodian to ensure that the longest payout period possible is available for the inherited IRA is October 31, 2020. Generally, only individuals who are named on an IRA beneficiary form can

Read More »
admin October 27, 2020

CRDS AND ROTH CONVERSIONS – ABUSE OF THE RULES?

The coronavirus-related distribution (CRD) rules for Roth conversions have a gaping hole. An “affected person” (as we have defined in previous blogs), is entitled under the CARES Act to withdraw up to $100,000 from their IRA or workplace retirement plan. A CRD avoids the 10% early distribution penalty for those under 59 1/2, can be

Read More »
admin May 20, 2020

Rolling Over an RMD

Like most people’s lives, the retirement world is upside down. This is made evident by a single statement: “Required minimum distributions (RMDs) can be rolled over.” Yes, that is the new normal—at least for this year. RMDs are considered the first money out of an IRA and workplace plan. Typically, these dollars are ineligible to

Read More »
admin April 22, 2020
Scroll to Top