Common use of Qualified Charitable Distributions (QCD) Clause in Contracts

Qualified Charitable Distributions (QCD). If you have attained must complete a recharacterization no later than your federal income age 70 1/2, you may be able to make tax-free distributions directly tax-filing due date, including extensions, for the year you make the from your IRA to a qualified charitable organization. However, you initial contribution. If you timely file your federal income tax return, must track the amount of all deductible contributions made for tax you may still recharacterize as late as October 15 for calendar year years while age 70 1/2 or older and then reduce the QCD claimed filers. Recharacterizations must occur by transfer, which means that by those prior deductible contributions. Tax-free distributions are the assets, adjusted for gains and losses on the recharacterized limited to $100,000 annually. This amount is subject to an annual amount, must be transferred into another IRA. The recharacterized cost-of-living adjustment, if any. Qualified charitable distributions contribution is treated as though you deposited it into the second are not permitted from an on-going SEP or SIMPLE IRA (meaning IRA on the same day you actually deposited it in the first IRA. your employer continues to make contributions). Recharacterization transactions are reported to the IRS. The election In addition, you may be able to elect to make a once in a lifetime to recharacterize may be completed on your behalf after your death. QCD of up to $50,000 to a split-interest entity. A "split-interest A written notice of recharacterization is required for entity" includes certain charitable remainder annuity trusts, recharacterization transactions. charitable remainder unitrusts, and charitable gift annuities. Some IRA Distributions. You or, after your death, your beneficiary may take limitations apply. For example, no person can hold an income an IRA distribution at any time. However, depending on the timing and interest in the split-interest entity other than the individual for whose amount of your distribution you may be subject to income taxes or penalty benefit such account is maintained, the spouse of such individual, or taxes. both. In addition, the QCD from your IRA must be made directly to