Congress decided to inflation-adjust both the existing and the new split-entity qualified charitable distribution limitations.
Utilizing tax-smart spontaneous giving only requires the smallest amount of planning ahead.
Luckily for the charitably-inclined individuals with nondeductible balances, QCDs are excluded from your Form 8606 taxable and nontaxable calculations.
If a portion of your charitable gift is nondeductible, then no portion of the gift can be counted as a Qualified Charitable Distribution. But there is one accepted loophole for QCDs.
“I will be turning 70 1/2 and wanted to start making contributions to charity from an IRA and taking the QCD at that time. Would this bill require me to wait two more tax years, until I am 72, to do this?”
“If you claimed the standard deduction on your federal income tax return, you must also claim the standard deduction on your Virginia return.”
Be sure to remember to tell your tax preparer that you did a QCD.
It turns out there is still a way to do a QCD out of those assets, but it requires a bit of planning ahead.
Taking these few extra steps can maximize your gift’s benefit to both you and the recipient.
These are two ways to benefit from the higher standard deduction while still fulfilling your charitable intentions.
If you choose to make a QCD, we suggest saving as much documentation as possible.
Unfortunately the age restriction makes the charitably-inclined young, who are more likely to be in the 0% capital gains bracket, unable to make QCDs.
What if you do not need all the money from your RMD and you are also charitably inclined?
QCDs allow individuals age 70 1/2 or older to give directly to a charity from your IRA without counting the distribution as taxable income.
Although a number of tax breaks got snuffed out by the recent tax compromise passed on January 1, the ability to make charitable contributions from IRA accounts for people older than 70 1/2 was given new life.
The tax code provision that allowed IRA owners to contribute up to $100,000 directly from their IRA to the qualified charity of their choice–without recognizing the donation as income–expired at the end of 2011, but what if it is reinstated?
There are three IRA tax requirements and saving techniques which collided recently for a client. I found a solution.
The law allows taxpayers age 70 1/2 or older to donate up to $100,000 from their IRA directly to a charity. The amount of the charitable contribution is excluded from taxable income.
Only contributions made to charity before January 1, 2008 can be characterized as qualified charitable distributions.