Charitable IRA Rollover

Julia M. Carlson |

Q: Dear Julia: Since turning 70 ½ I must take out my Required Minimum Distribution (RMD) from my IRA (Individual Retirement Account) by the end of each year. I don’t need this money for income and would rather not have to pay income taxes on it. I have heard that I can do a charitable rollover distribution, can you explain to me what this is?

A: Yes! An IRA Charitable Rollover would be a perfect idea. An IRA charitable rollover (also known as a Qualified Charitable Distribution) is a means by which a gift to charity can be made from your traditional IRA. That gift does not count as taxable income to you (provided you made the gift in the same year) and does count toward your annual Required Minimum Distribution. The rollover value cannot exceed $100,000. If you contributed amounts greater than $100,000 it would be added to your taxable income. The rollover must be completed by December 31 of the year in which the contribution is to count against taxable income. Also, the rollover must come only from a traditional IRA, and the check made payable directly to the charitable entity.

These ideas can become tricky! Please reach out if you need any help facilitating these strategies, we are here to help.

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Information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.