The IRA Charitable Rollover: A Financial Win-Win!
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The tax code is a massive labyrinth of regulations and stipulations. But for every way that the tax code can trip you up, there will be unexpected benefits—one of which is the IRA charitable rollover! This magical option allows you to give to your favorite charities without having to count the distributions as taxable income for up to $100K.
Of course, as in an amusement park where you have to be a certain height to ride the roller coaster, you have to meet certain requirements in order to garner the benefits of the IRA charitable rollover. You have to be 70.5 years old, which is the age at which people are required to make distributions from their IRAs annually.
The rules for a qualified charitable distribution, or QCD, are pretty strict: The donations must be sent straight to the organization (no detours or pit stops). The organization must be public—no donor-advised funds or private foundations, except in rare circumstances, and you must receive no free goods or services, or any quid pro quo. Get a written receipt from every charity recipient. If you distribute $100K between five charities, you must get five different receipts.
As always, be sure to consult with your trusted financial advisor and tax advisor before incorporating the IRA charitable rollover into your financial planning. If you believe that you qualify for reaping the rewards of the IRA charitable rollover, call Edwards & Associates for a free consultation today!
EDWARDS & ASSOCIATES, FINANCIAL SERVICES, INC.
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