A Prudent Stewardship Tactic: the IRA-QCD. A strategic tax and donation tool.
I recently met with a longtime client who has crossed the age marker which requires him to annually take a taxable distribution from his Traditional IRA. I know he consistently gives offering/tithe to his church and also monetarily supports a few non-profit organizations. He doesn't necessarily need the IRA income right now and would prefer not taking the withdrawal, since it increases his taxes, but it is the law. We have already done some long-term planning around his desires and plans for his children and ministries upon his death. While I met with him, I introduced the consideration of utilizing the QCD rule. Since he will continue to gift money regularly in coming years, it will be wise to utilize the income exemption for donating directly from his IRA accounts. For many M2 clients/friends, donating money to their church, a meaningful non-profit ministry or preferred charity is a regular part of their finances and budget. While there is no secret
