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Category: Deductions

What are special charitable contributions for IRA owners?

Some taxpayers may want to transfer some funds from their IRA to an eligible charitable organization. If this method for donating applies to you, here are some things you may need to know:

* If you own the IRA, you must be ago 70 1/2 or older when you make the distribution.

* The one making the donation must transfer the money directly to the tax-free organization.

* The maximum amount of the donation is $100,000.

* Donations from SIMPLE IRA's or SEP Plans are not eligible.

* The funds must be coming directly from the IRA owner to the charity.

* The funds donated are not taxable and there is no deduction for the funds given to the charity unless nondeductible contributions are transferred.

* Charities such as donor-advised funds and supporting organizations are not eligible.

* If a nondeductible contribution is transferred to a charity, a charitable deduction may be allowed if you itemize.

 

Additional information about qualified charitable distributions can be found in Publication 590-B, Distributions From Individual Retirement Arrangements.

 

To indicate this within the program, go to:

1. Federal Section

2. IRA/Pension Distributions

3. Nontaxable Distributions

4. Check here to mark this as a Qualified Charitable Distribution (QCD) on your return

5. Complete Form 8606Nondeductible IRAs, if:

* you made the qualified charitable distribution from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or

* the qualified charitable distribution was made from a Roth IRA.

* Form 8606 can be found in the

1. Federal Section

2. Deductions

3. Adjustments

4. Nondeductible IRA's Form 8606

 

Links: IRA FAQ and Charitable Contributions