Now, more than halfway through the year, it is evident that individuals are taking advantage of the Legacy IRA Act that became law in January 2023.
Most IRA owners do not think about their Required Minimum Distributions (RMD) in the first half of the year. For them, it’s now time to consider when to take RMDs before the end of the year.
RMDs are taxable events. They must be taken in a calculated amount by year’s end and will be included as 1099R income for 2024. To reduce or eliminate income taxes on RMDs, many IRA owners contribute a tax-free portion of their RMD directly to the charities they support. This is more formally known as a Qualified Charitable Distribution (QCD).
Thanks to the Legacy IRA Act, QCD rules now enable an IRA owner to withdraw all or part of the RMD, tax-free, to purchase a Charitable Gift Annuity (CGA). This is a unique addition to the QCD rules, which previously did not permit a tax-free IRA withdrawal to be used for a CGA.
If you haven’t already established a Legacy IRA, you can do it before the end of 2024. With a Legacy IRA, you will obtain high, fixed-rate lifetime income (individually or jointly with your spouse) using a tax-free RMD distribution from your IRA.
Legacy IRA funding amounts and other rules apply.
For more information and a personalized calculation, please contact us at plannedgiving@afhu.org or at 212.607.8524. |
