QCD (Qualified Charitable Distribution) Rules | Ed Slott and Company, LLC

QCD (Qualified Charitable Distribution) Rules

By Beverly DeVeny, IRA Technical Expert
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QCDs – Qualified Charitable Distributions – are a means of transferring IRA assets to a charity. The transfer is not taxable to the account owner and a charitable deduction cannot be taken.

The basic rules for a QCD follow:

• You must be at least 70 ½ at the time of the transfer. This applies to both IRA owners and IRA beneficiaries.
• You can transfer up to $100,000 per person, per year. Married couples must each transfer from their own accounts.
• It must be a direct transfer to a qualifying charity. Grant making foundations, donor advised funds and charitable gift annuities generally do not qualify for this purpose.
• No split interest gifts.
• Does not apply to employer plans. Only applies to pre-tax amounts in IRAs, Roth IRAs, and inactive SEP and SIMPLE IRAs.
• The QCD can be used to satisfy a required distribution for the year.
• The contribution to charity would have had to be entirely deductible if it were not made from an IRA. There can be NO benefit back to the taxpayer. Charitable substantiation requirements apply.

This provision is set to expire at the end of this year, 2011. If you will be doing some charitable giving anyway, don’t miss this opportunity to move taxable assets to a charity at no cost to you.
 

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