IRA Charitable Rollover

A donor who inherits an IRA also inherits the ability to use the IRA to make qualified charitable distributions (QCDs), along with the limitations of this gift type.

To make a QCD contribution to charity, the beneficiary of the inherited IRA must be at least age 70 ½ at the time of the QCD. The age of the IRA’s original owner is not relevant, nor is the inheritor’s age at the time of the decedent’s death. The age that matters is that of the donor at the time they make the gift.

At the end of the year, donors may be frazzled by holiday planning and leave their charitable giving to the last minute. To help ensure that their end of year gifts count for the current tax year, here’s a primer on how to determine gift date. We’ve also included a digital checklist as an additional resource from our experts at Foundation Source with the most important milestones for private foundations throughout the calendar year—including key dates for year-end giving.

PG Calc speculates and offers commentary about impending changes to Federal tax policy and the possible impacts on charitable giving. However, written on the eve of America’s transition to the Biden/Harris administration and the beginning of the 117^th Congress, there’s a good chance that parts of it will pass into the category of "things we know for sure that just ain't so."

Qualified charitable distributions (QCDs), also known as charitable IRA rollovers, are particularly appealing to donors because they provide a tax benefit whether or not the donor itemizes deductions. While on the surface they seem simple – request a payment go directly from the plan administrator to a qualifying charity – there are nuances to these types of gifts of which charities should be aware. Let’s take a closer look at some of those subtleties as they relate to QCD requirements.

The charitable IRA rollover is one of the great innovations in charitable giving of the last few years. Referred to by many as a qualified charitable distribution, or QCD, the charitable IRA rollover first came into being as part of the Pension Protection Act of 2006, but only through 2007. After a series of extensions, the charitable IRA rollover was made permanent in 2015 with the signing of the Protecting Americans from Tax Hikes Act (Path Act).

The end we are talking about is the end of calendar year 2016.  Are you ready?  Most charities concentrate on year-end giving in the fourth quarter and for good reason.  A study conducted by the Center on Philanthropy at Indiana University focused on high-net worth donors found that 42.7 percent of those surveyed gave more during the holidays than the rest of the year. Nonetheless, in addition to soliciting and encouraging gifts at the end of the calendar year, it is also a time for planned giving departments to prepare and plan.