IRA

Donating your IRA distributions to a Charity

Qualified charitable distributions (QCDs) have been permanently extended. Individuals can donate up to $100,000 per year directly from a traditional or Roth IRA to qualifying charities. This is attractive to some investors because QCDs can be used to satisfy required minimum distributions (RMDs) from an IRA without having the distribution included in their 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.

Limitations on Distributions

Restrictions set on QCDs include the following:

• $100,000 maximum per person per year
• Distributions transferred to the charity no later than Dec. 31 of the current tax year
• Must be a direct IRA distribution from the IRA
  custodian or trustee to a qualified charity
• Not all charitable organizations qualify
• Applicable only for traditional and Roth IRA distributions (excludes SEP and SIMPLE IRAs)

Making a QCD provides an opportunity to make a charitable contribution that you might otherwise not have been able to make and/or receive potential tax benefits for charitable contributions that you are already making. You should consult your tax advisor and estate-planning attorney about your situation.

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
• For those who don't itemize deductions - If QCDs are used as the funding source for chari- table 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

Qualified Charitable Distribution (QC)

Qualified Charitable Distribution (QCD) allows IRA holders, age 70½ or older, to donate to a qualified charity from their Traditional or Roth IRA (including inherited) tax-free.

Requirements

• The donating IRA holder must have attained age 70½ on or before the date the QCD check is issued. If an inherited IRA, the beneficial owner must have attained age 70 ½ or older
• The funds must be issued directly to a qualified charity from a Traditional or Roth IRA. Generally, a qualified charity includes: most public charities, including religious institutions, certain veterans' organizations, fraternal societies, and community foundations that provide scholarships. The charity also must be one to which deductible contributions may be made
• The donor cannot receive any benefit from making a QCD and the QCD cannot be deposited by the charity into a donor advised fund
• The amount cannot exceed $100,000 annually, per donor
• Checks must be issued by December 31st in order to apply to the current calendar year. If a Money Market check is written, it will apply to the year in which it is cashed by the charity

Best Practices/Steps

1. Consult your tax professional to ensure it is in your best interest to complete a QCD and your distribution qualifies
   • Notify the charity they will be receiving a check from you and obtain the following important details:
   • How the check should be made payable
   • Mailing Address
   • Contact person responsible for issuing a receipt to you, upon receiving the funds
2. Contact your Edward Jones Financial Advisor to request the funds be issued from your Traditional or Roth IRA as a QCD. You will need to discuss liquidating securities if the account does not have cash and/or money market
   funds available
3. Follow up with the receiving charity 7-10 business days after the check is issued. Verify they received the funds and have mailed a receipt to you
4. After obtaining the receipt from the charity, mail a copy to your tax professional and keep the original with your permanent tax records

Complete and Retain

If funds have been issued from your Traditional or Roth IRA and sent directly to a charity, following the Qualified Charitable Distribution (QCD) requirements, complete the information below and retain for your individual records. This
does not replace the need to obtain a receipt from the receiving charity.

Traditional or Roth IRA Withdrawal for Qualified Charitable Distribution (QCD)

• Account #
• Qualified Charity
• Contact Person
• Telephone
• Extention
• Address
• City
• State
• Zip Code
• Check amount
• Date issued
• Date of receipt from charity
  
  Keep with your permanent tax records