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The subject of QCDs is on readers’ minds. As a reminder, a qualified charitable distribution is a way to donate to charity that is available only to IRA owners who are age 70½ (repeat, age 70½) or older. When QCD rules are followed (see my blog at tinyurl.com/mw42ppcf), the withdrawal does not count as income at tax time. That’s a huge benefit to the charitably inclined, especially if they are older and taking RMDs (required minimum distributions).

This is how I think of the decision-making process when considering doing a QCD:

1. Do you want to give to charity?

2. How much?

3. Are your living expenses covered even if you make the gift?

4. What assets could you use to make the gift? That is, what are the possibilities, such as cash, stock, etc., or perhaps an IRA?

5. Do you normally take the standard deduction or itemize?

6. If you normally use the standard deduction, will the size of the gift be sufficient to consider itemizing?

7. Do you have an IRA?

8. Are you over 70½?

9. Are you taking RMDs from your IRA?

10. Do you have a 401(k) or 403(b) or other tax-deferred retirement plan?

11. Do you have an accountant who does your taxes, or do you do them yourself?

With the answers to these questions, you can start to assess charitable gifting possibilities.

Let’s consider “Mort’s” situation. Age 75 and single, Mort wants to give $50,000 to his local hospital’s foundation, and the amount is well within his budget. His potential sources are a bank account; appreciated stock; a tax-free Roth IRA; and a large 401(k). Notice that he does not have a traditional IRA.

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