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Some of our members have asked for more information on QCD’s, RMD’s, Donor Advised Funds and automatic annual payments and what this all means.

A QCD is a Qualified Charitable Distribution. According to Fidelity Investments “a QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity.... In addition to the benefits of giving to charity, a QCD excludes the amount donated from your taxable income, which is unlike regular withdrawals from an IRA which are generally taxed.” PBKNCA is a qualified charitable organization.

 

QCDs can only be made once a taxpayer has reached the age of 70 ½ years and are limited to a total of $100,000 per tax year. Whether or not an IRA account may be used to make a QCD depends on the type of IRA and your individual situation. You may make a QCD if you are 70 ½ or older regardless of whether or not you are required to take a Required Minimum Distribution (RMD) from your IRAs, either because of the age requirement, which was raised under the 2019 Secure Act or because of the blanket waiver of RMDs for 2020 It is important that a donor abide by the following rules for the donation to receive QCD treatment:

 

1. Any QCD must come directly from your IRA trustee Custodian (financial institution) to the qualified charitable organization, you cannot receive the funds then pay it to the charity.

2. The donor may not receive any goods or services for their donation.

 

3.  We must be able to process the donation within the calendar year, which means that last minute donations just before the end of the year won’t get this special treatment. Please be sure to make your donation no later than November 30th.

 

This organization is not qualified to give you tax advice. You need to consult your tax advisor and/or IRA Custodian to determine if this type of donation is appropriate for you.  The tax laws dealing with IRAs have changed recently and may change again.

The check should be sent to:

 

Ms. Patricia Kenber VP Membership, ΦBKNCA, 1073 River Rock Lane, Danville CA 94526-4001

 

A RMD is a Required Minimum Distribution. The IRS states “You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½.(now 72, see above)”  a certain age which as of May 2020 may be 70 ½ or 72 depending on your birthdate. Your required minimum distribution is the minimum amount you must withdraw from your account each year.  For most people, this amount is added to your taxable adjusted gross income. By making a charitable contribution (QCD) from your required minimum distribution (RMD) to a qualified charity like PBKNCA you will not only do meaningful philanthropy but may lower your adjusted gross income.

 

 A Donor-Advised Fund (DAF) is like a charitable investment account, for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities or other assets to a donor-advised fund at a public charity, like for example Fidelity or Schwab Charitable, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth and you can recommend grants to virtually any IRS-qualified public charity. This is not the same as a QCD.

 

Although the PBKNCA cannot and does not offer financial advice, if these vehicles sound like something that fits your philanthropic needs, please contact your financial advisor or institution for further details.

 

Automatic Annual Payments can be made through PayPal. See the page devoted to that.