What is a Qualified charitable distribution?
A qualified charitable distribution is a direct transfer of up to $100,000 annually from an Individual Retirement Account to a qualified charitable organization available to taxpayers aged 70½ and older. The distribution bypasses the account owner entirely, flowing directly from the IRA custodian to the charity, eliminating regular income taxation on the withdrawal. Many retirees first roll funds from Traditional 401k accounts to IRAs to access QCD benefits. QCDs count toward required minimum distribution obligations, providing tax-free charitable giving while satisfying mandatory distribution requirements.
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