by Owen Canfield, associate director for gift planning for the Catholic Foundation of Oklahoma
At the Catholic Foundation of Oklahoma, they are happy to see more people making gifts to the Church from their Individual Retirement Accounts. This tool makes giving easy and it provides an attractive tax benefit.
Because deposits into traditional IRAs are made pre-tax, withdrawals must be claimed as taxable income. However, the government allows those age 70 1/2 or older to make gifts tax-free from their IRA to any qualified 501(c)3 charity.
These are called Qualified Charitable Distributions, or QCDs. They are especially useful once a person reaches 72; the age when the government sets required minimum distribution amounts from IRAs.
An advantage of a QCD is that donors can give up to $100,000 annually from their IRA and pay no income tax on the distributions.
David and Marlene Rosbach, parishioners at Saint Charles Borromeo Catholic Church in Oklahoma City, are advocates of QCDs.
Through the years, the couple frequently used appreciated stock to make charitable gifts. However, as David said, giving from their IRA when they turned 72 “was just kind of a no-brainer because it’s a lot simpler.”
Once they are notified of the amount of their required minimum distribution, the Rosbachs tell their broker where they wish their gifts to go, and in what amounts. The broker takes it from there.
David said the tax advantage is nice, but it isn’t the primary reason for making gifts from his IRA.
“For me, it simplifies tax filing,” he said. “By planning my gifts, I’m reducing taxable income rather than taking the income and worrying about how much of my gifts are deductible.”
Whether it’s giving to the parish offertory, supporting the Annual Catholic Appeal or giving in other ways, the potential uses for people to use QCDs are extensive.
One QCD user said he had known about this tool for some time, but only started using it last year.
“I finally decided it was time to get it done,” he said. “It worked out fine and I intend to do it again this year and however much longer I’m around.”
For information about QCDs, call Owen Canfield at (405) 709-2897 or e-mail [email protected].
Owen Canfield is associate director of gift planning at the Catholic Foundation of Oklahoma.