IRA Charitable Distributions

Congress Makes Qualified Charitable Distributions from IRAs Permanent

If you've been considering donating part of your IRA to Learning Tree Farm to satisfy your required minimum distribution, now is the time to act. Congress passed the Protecting Americans from Tax Hikes (PATH) Act, permanently allowing IRA owners who are at least 70 1/2 years old to give up to $100,000 directly from an IRA to a charity without having to include the distribution in taxable income for the tax year.

Donating IRA funds directly to qualified charities allows the IRA holder or beneficiary to avoid taking possession of the funds and the tax bill that comes with them. It also allows the extra income to be excluded from tax formulas for Medicare premiums or for the Pease limitation on itemized deductions.

In brief, a qualified charitable distribution (QCD) from an IRA can be made only be an IRA owner or beneficiary age 70 1/2 or older, and can total up to $100,000. A spouse age 70 1/2 with an IRA could give up to $100,000 as well. A QCD can be used to meet your required minimum distribution. The funds, which cannot come from active SEP or SIMPLE IRAs, must be sent directly to the qualified (IRS-approved) charitable organization.

Learning Tree Farm is a qualified charity meeting the eligibility requirements for IRA qualified charitable distributions. If you would like to make an IRA qualified charitable distribution to Learning Tree Farm, please consult your tax advisor.

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