What is Qualified charitable distribution?
In short
A qualified charitable distribution is a transfer made directly from an individual retirement account to a qualifying charity by an owner aged 70½ or older, up to an annual inflation-indexed limit. It is excluded from the owner's income.
Key takeaways
- It counts toward the owner's required minimum distribution.
- It isn't also deductible, but it helps taxpayers who take the standard deduction.
- Gifts to donor-advised funds don't qualify.
Where it's tested
TCP: Retirement Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer has $90,000 in traditional IRAs, of which $9,000 represents nondeductible (after-tax) contributions. The taxpayer converts $10,000 to a Roth IRA. How much of the conversion is taxable?