Lessons from Lee: Qualified Charitable Distribution

Summer is here. And that means trips to the beach, picnics, and hikes.

Summer is also a good time to plan your charitable giving for the rest of the year.

One tax-smart approach is to set up a Qualified Charitable Distribution (QCD) from your IRA. Because the money goes directly to charity – I hope you’ll consider the League – a QCD counts as a Required Minimum Distribution without adding to your adjusted gross income. You must be at least 70½ years old to make a QCD, which can be as much as $100,000 each year.

The Basics

When IRA owners reach age 72, they are required to take yearly minimum distributions — even if they don’t want or need the income. These distributions are taxed as ordinary income, which could have unfavorable tax implications. A great solution could be to request an IRA Qualified Charitable Distribution to a favorite charity — like the League! — because Qualified Charitable Distributions are not taxable as income.

How it Works

  • Direct a transfer from your IRA account directly to the Preservation League of NYS (or other eligible charity).

  • Exclude the amount of your distribution from your income for federal tax purposes.

  • Count it toward your Required Minimum Distribution for the year.

  • Make an immediate impact!

Click here for a sample Distribution Request Letter.

Please note: The League cannot offer legal, financial, or tax advice. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances.

Lee MillerLessons from Lee