RMD & Appreciation Stock
Did you know that you may be eligible for a tax break and help our church at the same time? If you are over 72 and have a traditional IRA, you will have a required minimum distribution (RMD) which must be distributed out of your IRA each year. Instead of accepting those funds directly and paying taxes on the funds, you can transfer the funds directly from an IRA to an IRS approved charity, such as All Saints.
This is a qualified charitable distribution (QCD). There are minimal requirements to this but the main one is that the funds must go directly from your IRA to the charity. Although the charitable contribution is not deductible, the distribution from the IRA is not taxable. The payout qualifies as a RMD. This technique can be done to satisfy all or any portion of your RMD.
Also, if you have any stock that has appreciated in value you can get a charitable deduction for the current price at the time of transfer without having to pay capital gains tax on the increased value of the donated stock. For instance, if you have stock which you bought at $1.00 and it is now worth $10.00, you can transfer that stock directly to All Saints’ and have it sell the stock at $10.00. All Saints’ is a tax exempt entity so it will not be required to pay any capital gains taxes on the $9.00 in gain. The donor gets to deduct the full value of the stock, or $10.00 in this example. This is another win-win for the taxpayers and our church.
If you have any questions, contact your tax advisor or Finance Committee members Tom Simpson,
thomassimpson@bellsouth.net or Nancy Ball,
nkwball@gmail.com.
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