Qualified Charitable Contribution (OCD) from Roll-Over IRA

Forum|Forum|2 years ago
July 2, 2024
2 replies
33 views

MFJ client both 71 years old. They take the standard deduction each year, with itemized items well below standard. They would like to make a QCD directly from their Roll-Over IRA. I have little experience with this. My research indicates:

- They do not need to make an RMD until they reach 73.

- They can inform their IRA administrator to make the contribution directly to the charity. Can they consider this amount as their RMD? If so, I believe the amount would be excluded from their taxable income.

- Can the OCD be considered a charitable contribution, allowing them to itemize? Since the amount is excluded from taxable income, I would think it would qualify?

Appreciate any information you can provide.

Thank you

ProSeries Professional

qbteachmt

Level 15

The IRS knows:

https://www.irs.gov/newsroom/qualified-charitable-distributions-allow-eligible-ira-owners-up-to-100000-in-tax-free-gifts-to-charity

"They can inform their IRA administrator to make the contribution directly to the charity."

Have to. Not a Can, but a Must.

"Can they consider this amount as their RMD?"

Yes: https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity

"If so, I believe the amount would be excluded from their taxable income."

Yes.

"Can the OCD be considered a charitable contribution, allowing them to itemize?"

No. It would typically be reportable income and then offset by that deduction. A QCD already excludes the distribution from being reported as income. Can't double-dip it.

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