IRAs, QCDs and
RMDs, OH MY!
RMDs, OH MY!
QCD is an acronym for this gift from an IRA.
Qualified Charitable Distribution - a direct transfer from an IRA to a charity
A donor who uses a QCD to fund a CGA cannot avoid this when they take their annual payments.
Federal income taxes
The total QCD amount a married couple can contribute together to a CGA that pays on 1 or 2 lives
$100,000
New CGA payout rates are effective on this date
January 1, 2023
The minimum age a taxpayer can do an IRA QCD in 2023.
70.5
When using a QCD to fund a CGA, unfortunately a donor cannot take this.
A charitable deduction
The total amount a donor can contribute to charity via IRA QCDs (including funding a CGA with their QCD)
$100,000, includes $50,000 to fund a CGA
Current rates are higher than they've been in over a _________!!!
decade!
The maximum that can be donated by a taxpayer to charity via IRA QCD in 2023.
$100,000
Each taxpayer's limit for a QCD-funded CGA
$50,000
Recipient(s) of CGA payments if funded with a QCD
Donor and/or spouse only
ACGA is an acronym for this organization that suggests the maximum gift annuity rates
American Council of Gift Annuities
Minimum age in 2023 to take required minimum distribution (RMD).
73 up from 72 in 2022, Thanks, Secure Act 2.0!
A CGA funded by QCD can be delayed from the gift date for up to ______ year(s)
1 year
QCD to fund a CGA satisfies this if applicable
Required minimum distribution
Current payout rates are on average this much higher than old rates
0.6% or 60 basis points
Consider this scenario: A donor aged 72+ can fund a CGA with a QCD or cash. Which asset should they use, in other words, which is smarter tax-wise?
Fund with a QCD unless using appreciated assets that trigger capital gains, like stock
The number of times a donor can elect to fund a CGA with a QCD in their lifetime
One time election in a donor's lifetime but can be aggregated to include multiple CGAs with multiple charities if in the same tax year
The gift date of a CGA funded by a QCD
The date of distribution from the IRA. The "mailbox rule" does not apply.
The February 2023 IRS discount rate is 4.6%. In general, the higher the discount rate, the _________the charitable deduction
Higher
However, for seniors who create gift annuities and do not itemize, the lowest IRS discount rate will produce the highest tax-free payout.
The legislation allowing a QCD to fund a CGA is found in the Secure Act 2.0 and is called The ____________
The Legacy IRA Act