Making a Qualified Charitable Distribution

Meeting a Required Minimum IRA Distribution with a Qualified Charitable Distribution to Northern Neck Land Conservancy

Land lovers with individual retirement accounts (IRAs) can meet their required minimum distribution by making qualified charitable distributions (QCDs.) This method offers a nice option for generous people who are 70 ½ or older to support open space land protection in the Northern Neck and Essex County. A QCD can brings much-needed financial support to the Northern Neck Land Conservancy mission.

Key Things to Understand About QCDs

A qualified charitable distribution can provide several potential benefits. It is a winning giving strategy for donors who:

• Are required to take a minimum distribution from an IRA, but don’t need the funds and would face increased tax liabilities if they took the distribution as income.
• Would like to reduce the balance in an IRA to lower future required minimum distributions.
• Would like to make a larger charitable gift than they could if they simply donated cash or other assets. The value of charitable gifts that can be deducted from a tax return usually ranges from 20 to 60 percent of the donor’s adjusted gross income. This AGI-based limit does not apply to QCDs, allowing donors to make larger gifts.

To make a non-taxable qualified charitable distribution:

• The gift is made directly to Northern Neck Land Conservancy from a traditional IRA, inherited IRA, inactive Simplified Employee Pension plan and inactive Savings Incentive Match Plan for Employees (SIMPLE) IRAs.
• The money is a direct transfer to the charity that never passes through the hands of the IRA holder. Instead, the IRA custodian can either send an electronic transfer of funds or a check directly to the charity.
• For a QCD to count toward your minimum annual IRA distribution, it must be made by the same deadline as a normal distribution, which is usually Dec. 31 of the tax year in question.

Please note that the information on this webpage is not financial, legal or tax advice. Please consult your professional advisor/s with any questions about making a qualified charitable distribution.