QCD Testimonial

"My wife, Margo, and I have been strong supporters of HABcore for nearly 40 years. We feel privileged to be part of a charitable organization that makes such an impact on those who need it most. HABcore provides housing for local individuals and families in need, in addition to services needed for long-term stability.

We recently found a more financially strategic way to share our gifts with HABcore. We now make contributions directly from our individual IRA accounts. In 2025, each individual age 70-1/2 or older may gift up to $108,000, without tax penalty, to any qualified 501 (c)(3) nonprofit organization. We learned that by instructing our IRA custodian to send our contribution directly to HABcore, that gift amount does not count as taxable income. This is also a great way to satisfy one’s required minimum distribution starting the year that it becomes mandatory depending on one’s age.

This is known as a Qualified Charitable Distribution. Not only does this allow the funds to bypass our income, but it will also satisfy our required minimum distribution when that day comes.

Using the QCD as a donation tool allows us to give more significant funds. Last year we learned that a ceiling at one of HABcore’s boarding homes collapsed. Fortunately, we were able to provide the needed funding to provide funding for significant structural repairs by using funds in our IRA.

In summation, gifting funds from our IRAs has allowed us to increase our philanthropic giving to HABcore."

1. Qualified Charitable Distributions and Tax Benefits:

• Individuals aged 70½ or older can directly transfer up to $108,000 annually from their IRA to an eligible charity without the distribution being included in their taxable income. This is known as a Qualified Charitable Distribution (QCD) or IRA Charitable Rollover.
• For individuals aged 73 or older who are required to take annual Required Minimum Distribution (RMD) from their traditional IRAs, a QCD can satisfy all or part of their RMD obligation, further reducing income taxes on that portion.
• Potentially this can reduce your Adjusted Gross Income (AGI). Lowering your AGI through QCDs can be advantageous, as it may reduce the taxable portion of Social Security benefits or potentially decrease Medicare Part B and D premium surcharges.
• QCDs allow individuals to reduce taxes on distributions that would otherwise be taxable, even if they don't itemize deductions.

2. Impactful Charitable Giving:

• Donating directly from an IRA ensures that the full amount of the donation goes to the charity, without being reduced by income taxes.
• QCDs can potentially enable donors to give larger charitable gifts compared to donating cash or other assets, as the donation is not subject to AGI-based deduction limits.

3. Additional Estate Planning Considerations:

• While QCDs are made during the donor's lifetime, naming a charity as the beneficiary of an IRA in estate planning offers other advantages, such as reducing income tax for heirs and potentially lowering estate tax liability.
• Donating IRA assets to charity allows individuals to support their favorite causes and create a lasting legacy.

Important Considerations:

• QCDs must be made directly from the IRA trustee to the charity; funds withdrawn and then donated by the individual do not qualify.
• The charity must be a qualified, tax-exempt organization (generally, a 501 (c)(3) public charity).
• Individuals should consult with a tax professional or financial advisor to determine if a QCD is the right strategy for their individual circumstances and to ensure proper implementation and reporting.