More Ways to Give: Qualified Charitable Distributions from IRAs

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By Doug Loftus, CFP, AIF, Managing Member, Wealth Dimensions Group Ltd.

Are you or someone you know over the age of 70 ½ and looking for more ways to give to The LAM Foundation? You may be able to donate through a Qualified Charitable Distribution! Read on to learn more about this opportunity to give.

What is a Qualified Charitable Distribution?

If you are over the age of 70 ½, the government requires you to take annual distributions (withdrawals) from your Individual Retirement Account (IRA)—a provision known as the Required Minimum Distribution.

A Qualified Charitable Distribution is a withdrawal that is paid to a charity. These withdrawals—up to $100,000 annually—can be made tax-free if they are directed to a qualified 501(c)(3) organization. Good news: The LAM Foundation is one of these organizations!

What are the benefits?

A Qualified Charitable Distribution can:

  • Satisfy all or part of your annual Required Minimum Distributions
  • Provide a charitable giving strategy if you do not need the additional income
  • Be used to fulfill any outstanding pledges
  • Maximize giving by allowing you to give outside of the 60 percent of adjusted gross income (AGI) charitable deduction limit
  • Provide value if you are a non-itemizer, or live in a state that does not allow charitable deductions
  • Minimize tax liability through a dollar-for-dollar reduction in taxable income distributed from your IRA
  • Put you at a lower threshold for Medicare premiums by reducing income

What are the requirements?

You (or the IRA account holder) must be age 70 ½ or older at the time the distribution is made to The LAM Foundation. No goods, services, or income can be received in exchange for the gift.

Qualified Charitable Distributions:

  • Are limited to $100,000 per individual per year
  • Must be transferred/paid directly from the IRA custodian to The LAM Foundation (all major custodians can accommodate these distributions)
  • Can only be directed from a traditional or rollover IRA [not from a retirement plan such as a 401(k), 403(b), etc.]
  • Cannot be made to a donor-advised fund or supporting organization (including most private foundations)
  • Cannot be used to fund a charitable gift annuity or charitable remainder trust

How can I get started?

Please consult with your financial advisor to learn more about this significant tax planning strategy. Be sure to bring the information in this article with you. If you do not have a financial advisor, you may contact The LAM Foundation for more information.

As always, thank you for your support!

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