Page 14 - Leisure Living Magazine July 2016

Want to be Charitable? Your IRA May Help!
By Christopher McIntire, President, McIntire Retirement Services www.mcintireretirementservices.com
Most people do not think of using an IRA when they want to be charitable because of the tax implications of withdrawals. These withdrawals, taxed at ordinary income tax levels and depending upon your income, could be as high as 39.6% for 2016.
Thanks to the IRS you may be able to give money directly to a charity from your IRA without creating a taxable event! This is called a Qualified Charitable Distribution, or QCD for short, and it has been made permanent by the President. As with anything involving a charitable contribution or donation, make certain you speak with your tax advisor or legal representative to be sure you meet the guidelines.
Here are the basics of the QCD. First of all you need to be 70 1⁄2 to qualify. You read that correctly, you need to be 70 1⁄2 at the time of the donation. Secondly, the charity must be a qualified charity like a church or other non-profit organization, not your kids and grandkids! Lastly, you can give up to $100,000 a year from your IRA as a donation to your charity. Actually, you can split the donation amongst several qualified charities, like many of my clients do.
What I see many times is the client will donate their Required Minimum Distribution (RMD) to the charity and this then prevents them from creating a taxable event to satisfy their RMD each year starting at age 70 1⁄2. Previously this legislation was delayed until many people had already satisfied their distributions, so this will be a great relief to have it in a permanent status.
For those of you that do fundraising for charities you are involved in, this is a great way to look for donations from the public or members of churches, and so forth. An idea would be to put a message in your newsletters or emails.
What happens is the check is made out from your IRA custodian directly to the charity. The check will be sent to your address and you can present it to the charity at a time of your choosing. I find it beneficial to get the Taxpayer ID number from the charity, and their correct name, so the transaction is done correctly the first time. IRA mistakes can be costly and it is always helpful to do your proper due diligence well ahead of time.
Another important factor is that many people take their IRA distributions later in the year and if you can get your donations done a little earlier, you could prevent errors that occur when custodians are busy processing year end distributions.
Thank you for reading and enjoy the remainder of summer!
Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a Registered Investment Advisor. BCM and McIntire Retirement Services are independent of each other.
14 |LeisureLiving July 2016
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