Giving Through an IRA
If you are age 72 or older and have an Traditional IRA (tax-deferred), the IRS require you to take an RMD (required minimum distributions) each year. (RMDs) each year from your tax-deferred retirement accounts.
Rather than taking all of that RMD, or to make a larger gift, a donor can opt for a Qualified Charitable Distribution (QCD). A QCD allows the donor to directly transfer funds from their IRA, directly to a charity.
Current regulations as of the writing of this information allows donors to donate up to $100,000 per year from an IRA and that amount is counted towards your RMD. Joint filers (spouses) can each donate up to $100,000 from their individual IRAs in a given tax year. Donors often choose to withdrawal from their IRAs not only because that amount is excluded from your AGI, but because IRAs will likely be the highest taxed asset to pass on to heirs.
A QCD must be a direct transfer. Donors cannot take a regular withdrawal from an IRA, and then make a charitable contribution later on to receive the same benefits.
To qualify for a QCD, donors must:
If you are interested in supporting Nativity Prep’s students by giving through your IRA, you should reach out to your broker, financial advisor, or IRA custodian to request the QCD. Each custodian has their own paperwork and process, but they should issue a check payable to Nativity Prep Academy of San Diego, Inc. We suggest that you have the check mailed directly to us to ensure it is not taxed. Remember: distribution checks made payable to your name will be treated as a distribution would then be taxed as income.
The following IRAs qualify:
ROTH IRAs do not qualify under normal circumstances because they are not subject to RMDs during the accountholder’s lifetime.
Consult a tax advisor to determine if making a gift from your IRA is appropriate for your situation.
For more information on estate planning and planned giving, please contact Brian Hickey, Director of Donor Relations, by phone at at 619-544-9455, x 244 or by email at email@example.com.