IRA Distributions

Donate your IRA distributions!

Those 72 or older who have an Individual Retirement Account (IRA), may need to take Required Minimum Distributions from their IRAs, which can be donated as a charitable contribution to LifeSpark Cancer Resources.  By doing so, the donor may be able to avoid paying taxes on this portion of their income and maximize the impact their charitable dollars will have.

In addition, those 70 1/2 and older can take Qualified Charitable Distributions of up to $100,000 which can be made via direct transfer to LifeSpark.  CONTACT US.

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A qualified charitable distribution (QCD) is a distribution from a Traditional or Roth IRA made directly by the IRA trustee to a qualified charitable organization when the IRA owner is age 70½ or older. A QCD may satisfy the client’s required minimum distribution (RMD) and up to $100,000 of QCDs may be excluded annually from an individual’s taxable income.

Eligibility

A qualified charitable distribution may be made:

• When the IRA holder is age 70½ or older
• Directly from the IRA to a qualified charity
• From a traditional or Roth IRA

Qualified charities

Generally, a qualified charity includes most public charities that are eligible to receive tax-deductible contributions – including religious institutions, certain veterans’ organizations, fraternal societies and community foundations that provide scholarships.

LifeSpark Cancer Resources is a qualified charity. Our legal name is Healing Buddies, Inc.

Limitations

Restrictions set on QCDs include the following:

• Distributions transferred to the charity no later than December 31 of the current tax year
• Deductible contributions made during or after the year an individual reaches age 70½ will reduce the amount that may be excluded
  • Must be a direct IRA distribution from the IRA custodian or trustee to a qualified charity
  • Applicable only for traditional and Roth IRA distributions (excludes SEP and SIMPLE IRAs)

Key benefits

• • For those who give larger gifts – Deductibility limits do not apply to QCDs, which means the QCD can be made in addition to other charitable contributions that may be limited by the annual maximum deductible percentage of income or phase-outs of itemized deductions.

Additional Information

• For those who don’t itemize deductions – If QCDs are used as the funding source for charitable donations, the donor will receive tax benefits when there otherwise would have been none due to the use of the standard deduction.

• For those who pay taxes on a portion of their Social Security benefits – Income for determining the taxation of Social Security benefits is lower than if the IRA holder had taken the RMD, potentially reducing this taxation.
• For those whose income level subjects them to tax on Net Investment Income, or phase-out of personal exemptions or itemized deductions – A QCD made in lieu of an RMD will result in lower adjusted gross income for the IRA holder, which may lessen the effect of this tax or applicable phase-outs.

How to make the transfer

Contact the bank or brokerage firm that holds your IRA, since it has to be initiated there.  From there, the funds are sent directly to LifeSpark as cash.