RMD’s and Charitable Donations
I am confused about using all or a portion of our family’s anticipated RMD for a charitable donation. Our first RMD won’t occur for about 6 years from now. Some articles on the subject in the Chicago Tribune seem to imply that you can send some or all of your RMD to a recognized charitable organization without paying any $ to the Feds. Other people have told me that the Feds will always get their “share”, and after that, you can donate whatever you want, which will lower your taxable income for that year. If you pay the Feds their “share”, however, isn’t the gross amount of the RMD already taxed? If the gross RMD is already taxed, why would one care if the net RMD increases your yearly income? Does the net RMD amount gets taxed again? Hope I have made myself clear!
Terry Says
I don’t know where you got that info. Under current law you can have up to $100,000 of your RMD sent directly to a recognized 501(c)3 charity and it will count against your RMD, and you will NOT pay taxes on that amount.
But this is only “against” the RMD which you must pay, and does not apply until you are at the age for RMDs. However, you could name a charity as a beneficiary of your entire remaining IRA at death, and they would receive it tax free.
