Qualified Charitable Distribution (QCD)
background info
When you have a retirement account and are over the age of 70 1/2 you can donate to a charity from your IRA account.
The donation comes from your IRA and is sent to the charity. The release of the money is not to you.
For example, the check is made out to the charity, not you. The check could be sent to you and then delivered to the charity.
Why do this?
The biggest benefit here is you do not have to recognize the distribution as income. Effectively, you are able to make a donation of tax infested money.
Special tax return steps
You will receive a 1099R from your account custodian. The tax preparer you work with will need to know of your donation. The tax professional has to make a special note on the tax return that references the QCD.
founderS
The visionary
Rick Loek
Rick Loek is a member of Ed Slott's Elite IRA group. Rick has been a member of this group since 2007. Ed Slott's Elite IRA group is group of financial advisors, CPAs, Enrolled Agents and Attorneys who study best practices. Best practices in the area of retirement accounts.