Qualified Charitable Distributions

Still need to take your Required Minimum Distribution?

If you are at least age 70 ½, have an IRA, and plan to donate to charity this year, one consideration may be to make a qualified charitable distribution (QCD) from your IRA. This action can satisfy charitable goals and allows funds to be withdrawn from an IRA without any tax consequences. A QCD can also be appealing because it can be used to satisfy your required minimum distribution (RMD).

If you are subject to an RMD and have a desire to contribute to a charity, you could take the RMD proceeds as a taxable distribution and use them to make a charitable donation. Your IRA distribution would then be reported as income, but the subsequent charitable contribution using the proceeds from the RMD would generally offset the tax consequences—to the extent that the limits and phase outs allow it.

The qualified charitable distribution (QCD) option emerged after Hurricane Katrina in 2005 and was made permanent by Congress in 2015.

This type of donation qualifies for the Colorado Child Care Tax Credit for Colorado Residents.

Visit with your financial advisor for additional advice in making a charitable donation from your IRA to the Longs Peak Council. For more info contact John Coleman, Jr. Scout Executive at 970-584-2222.

Donate appreciated stocks vs cash!

As the holidays approach, many people look for ways of combining their desire to help the causes they believe in with their desire to save on taxes. For the charitably inclined, there are strategic ways of giving that can accomplish both goals.

Generally, if you itemize your deductions, making charitable contributions can decrease your tax bill, and with higher tax rates for high‐income earners, there is an increased tax benefit for charitable contributions.

In the giving mood? Here is a strategy to consider that can help you make the most of your giving to the Longs Peak Council this year.

  1. Give appreciated securities, rather than cash.

Donations made by cash or check are, by far, the most common methods of charitable giving. However, contributing stocks, bonds, or mutual funds that have appreciated over time has become increasingly popular in recent years, and for good reasons.

Most publicly traded securities with unrealized long‐term gains (meaning they were purchased more than a year ago and have increased in value) may be donated to a public charity, without the need to sell them first. When the donation is made, the donor can claim the fair market value as an itemized deduction on his or her federal tax return—up to 30% of the donor’s adjusted gross income (AGI). Other types of securities, such as restricted or privately traded securities and donations to nonpublic charities, may also be deductible, but additional requirements and limitations may apply.