Qualified Charitable Distributions

People older than 70 1/2 can transfer up to $100,000 per year from their traditional IRA's to charity, which can count as their required minimum distribution but is not taxable if they follow the rules for a qualified charitable distribution (QCD).

Individuals must instruct their IRA trustee to make the contribution directly to an eligible charitable organization. The gift stays out of your adjusted gross income only if you make a direct transfer from your IRA to the charity.  It doesn't count as a tax-free transfter if you withdraw the money first and then donate to the charity.  Ask your IRA administrator what steps you need to take, because the procedures can vary from firm to firm.

What is a "Qualifying Charitable Distribution"?

The requirements are relatively simple.  The charitable distribution must be:

  • From a traditional IRA or a Roth IRA;
  • Direct from the IRA trustee to the charitable organization - with no intervening possession or ownership by the IRA owner;
  • On or after the IRA owner has reached age 70 1/2; and
  • A contribution to an organization that would qualify as a charitable organization under Sec. 170(b)(1)(a), other than a private foundation or donor advised fund.

Please consider K12 Gallery & TEJAS for your qualifying charitable distribution.  For additional information, we recommend consulting with your tax advisor.