Qualified Charitable Distributions | QCD Planning | Intentional LLC

Qualified Charitable Distributions

Give from your IRA.
Pay no income tax
on the transfer.

A Qualified Charitable Distribution is one of the most underused giving tools available to donors over 70 and a half. It converts a taxable required minimum distribution into a charitable gift at no after-tax cost to you.

Start the conversation

Simple, overlooked, and genuinely effective for the right donor profile.

The simplest tool most people ignore

Your RMD is coming anyway.
A QCD lets you give it
to charity tax-free.

Beginning at age 73, the IRS requires you to take a minimum distribution from your IRA each year. For many donors, that distribution is taxable income they do not necessarily need. They would rather give it away than pay tax on it.

A Qualified Charitable Distribution allows you to transfer up to $105,000 per year directly from your IRA to a qualified public charity. The transfer counts toward your required minimum distribution. And it is not included in your taxable income.

For donors who take the standard deduction rather than itemizing, this is significantly more tax-efficient than making a cash gift and hoping for a deduction. With a QCD, there is no deduction because there is no income. The tax benefit is built directly into the structure of the transfer.

It is one of the simplest charitable planning tools available. And one of the most consistently overlooked by both donors and advisors who have not integrated the giving strategy with the retirement account strategy.

"A lot of clients in their 70s write checks to charity and wonder why it does not feel as efficient as they expected. The QCD is often the reason. The answer was sitting in their IRA the whole time."

James Roberts, Founder, Intentional LLC

One limitation worth knowing

QCDs cannot be directed to Donor Advised Funds, private foundations, or supporting organizations. The transfer must go directly to a qualifying public charity. For donors who use a DAF as their primary giving vehicle, this means coordinating the QCD and DAF strategies separately, which is straightforward with the right planning in place.

Keep reading

Related topics worth
understanding.

Charitable Planning

The broader conversation about giving with intention

Donor Advised Funds

The most flexible charitable giving vehicle available

Charitable Remainder Trusts

Convert a concentrated position into income and a lasting legacy

Common questions

What people ask about
Qualified Charitable Distributions.

  • A Qualified Charitable Distribution, or QCD, is a direct transfer from an IRA to a qualified public charity. Donors who are 70 and a half or older can make QCDs up to $105,000 per year. The transfer is not included in the donor's taxable income, even though no charitable deduction is taken separately. For donors who do not itemize deductions, this is often more tax-efficient than making a cash gift and taking a deduction.
  • Beginning at age 73, IRA owners are required to take a minimum distribution each year. A QCD counts toward that required minimum distribution without being included in taxable income. For donors who do not need the RMD for living expenses and have charitable interests, a QCD effectively converts a taxable event into a charitable gift at no after-tax cost.
  • QCDs are most valuable for donors who are 70 and a half or older with meaningful IRA balances, who take the standard deduction rather than itemizing, and who have charitable interests they want to support. For these donors, a QCD provides a tax benefit that a direct cash gift would not, because the cash gift would be deductible only if the donor itemizes. QCDs are also valuable for donors who want to reduce their taxable RMD income to avoid Medicare surcharges or other income-based thresholds.
  • No. IRS rules do not permit QCDs to be directed to Donor Advised Funds, private foundations, or supporting organizations. The QCD must go directly to a qualifying public charity. This is one of the key limitations of the QCD strategy and a reason why donors who want to use a DAF as their primary giving vehicle may need to coordinate their QCD and DAF strategies separately.

Start the conversation

Your RMD is coming.
Make it count for
something more.

If you are over 70 and a half and have charitable interests, a QCD may be the most tax-efficient giving tool you are not using. Schedule a conversation with James.

Schedule a conversation

30 minutes. No pitch. No pressure.