Are you thinking about taxes this time of year? If you are 70 ½ years of age or older, we thank you for considering a qualified charitable distribution (QCD) donation to the IBMA Foundation. The SECURE 2.0 Act of 2022 includes some good news for individuals over age 70 ½ and the charities they choose to support.
Specifically, there is an expansion of the rules for qualified charitable donations. A QCD is a direct transfer of funds from an Individual Retirement Account (IRA) to a qualified charity. QCDs can be counted toward satisfying required minimum distributions (RMDs) for the year if certain rules are met.
Here are some highlights for the 2024 tax year:
Increase in QCD limit: In 2024, individuals who are 70½ years old or older may use a QCD to donate up to $105,000 to qualified charities directly from an IRA. QCDs continue to be ineligible for a donation to donor-advised fund sponsors, private foundations, or supporting organizations.
Increase in IRA RMD age: The age for required minimum distribution (RMD) from an IRA was increased to 73—effective on January 1, 2023, and again to 75 starting on January 1, 2033.
One-time, split-interest election: A one-time election may be made for a QCD to a split-interest entity. Donors can make a QCD of up to $50,000 to fund one of either a Charitable Remainder Unitrust (CRUT), Charitable Remainder Annuity Trust (CRAT) or Charitable Gift Annuity (CGA).
Making charitable donations by using a QCD may enable you to bypass the rule that limits tax-deductible charitable gifts to 60% of your adjusted gross income. Also, QCDs are excluded from taxable income, which means that federal capital gains taxes are not assessed on the distributions.
QCD donations (cash or stocks) to the IBMA Foundation have been extremely helpful in supporting our mission to support programs and initiatives that foster the growth of bluegrass music—the project grants, Bluegrass in the Schools Mini-grants, Arnold Shultz Fund grants, Fletcher Bright Memorial Grants for young musicians, five college scholarships, the bluegrass college showcase at World of Bluegrass, educational videos like Stagecraft 101 and Discover Bluegrass, the Rosenberg bluegrass scholar award – everything we do!
Please contact Nancy Cardwell to discuss any questions you have about making a donation to the IBMA Foundation, and—of course—consult your own financial advisor for advice on what will work best for you.
Return to the March 2024 issue of The Cornerstone.
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