Qualification of a charitable IRA gift towards meeting the RMD for those past age 70 1/2?
I seem to recall coverage of the long term leverage that could be accomplished by an IRA owner, who is past 70 1/2, being able to make a direct charitable gift and have that gift treated as the RMD for a particular year. I cannot seem to find where this subject is covered in a report? I believe it was within the last 6 months, but cannot seem to locate it? Help?
Permalink Submitted by Alan - IRA critic on Tue, 2017-10-17 17:39
You could google QCD (Qualified Charitable Distribution) and find a number of articles. If you want to review additional technical issues regarding QCDs, start on p 13 of this IRS Notice: https://www.irs.gov/pub/irs-drop/n-07-07.pdf
Permalink Submitted by Leonard H Abrams on Tue, 2017-10-17 17:46
Thanks for your suggestions. It seemed to me that Ed had discussed this issue recently in a newsletter, but I have been unable to find the information with a “search”. I just thought someone might recall the discussion of the long term effect of using an IRA to fund charitable wishes. Thanks again.
Permalink Submitted by Alan - IRA critic on Tue, 2017-10-17 18:08
You might try googling “Slott report QCD”, as there are a number of articles on various aspects. Basically, a QCD will almost always result in a larger tax break for a donation of the same amount vs. itemizing a gift. Most seniors cannot even itemize, and even if they do the IRA RMD will be included in their AGI. With a QCD, the distribution is not in your AGI which can reduce taxes on SS income and provide other related benefits. For higher incomes it can even help avoid IRMAA (surcharged Medicare premiums for higher incomes).