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Ask Your Accountant August 2019

I inherited my mother’s IRA and I’m required to begin taking required minimum distributions (RMDs) this year.  Can I have the withdrawals transferred to a charity and not report them as income?

Taxpayers are allowed to donate up to $100,000 ($200,000 for a couple) of RMDs to charity in any year.  These are Qualified Charitable Deductions (QCD) but certain rules do apply.

  1. While the amount of the QCD is not considered taxable income, the payments to charity are not deductible contributions.
  2. The transfer must be made directly from the IRA to the charity before the RMD deadline for the year (usually December 31).
  3. You must be 70 ½ or older.
  4. The charity must be a qualified charity.  QCDs are not allowed to Donor Advised Funds, Private Foundations, split interest charitable trusts, or supporting organizations.

So, if you are 70 ½ or older and your charity qualifies, you can use your IRA RMD for a QCD!

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