Questions about contributing to a Qualifed Charitable Annunity to satistfy RMD

My wife and I are both in our mid-70’s and blessed to have substantial Traditional IRA’s, with the resultant Required Minimum Distributions (RMD).

My questions are about the new provision that allows us to contribute to Qualified Charitable Annuities (QCA) as part of our RMD. I’ve read they are “one-time” with a max of $50k.

Does one time mean one tax year, or only one QCA can be established? Can we set up more than one QCA as long it is in the same tax year?

We file jointly, can I make my contribution in one tax year, and my wife in another tax year?

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Accepted answers

KeriC

There isn't a lot of information from the IRS regarding CGAs since this is a fairly new tax law.

The most comprehensive source I have located can be found at:
https://www.acga-web.org/new-charitable-planning-opportunities-with-retirement-plans

From my understanding:
- You could contribute up to $50,000 from your IRA.
- Your spouse could contribute up to $50,000 from their IRA.
- More than one contribution can be made, but all contributions must be made in the same calendar year.
- Contributions would need to be made to the same CGA for both you and your spouse, so only one CGA between the two of you.
- I don't see anything that clearly specifies if you and your spouse both have to contribute to the CGA in the same year or not, but the conservative approach would be to both contribute in the same calendar year.

All comments

RyanEA

Reply is based on information at: https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity

Qualified Charity Distribution (QCD) are allowed to transfer up to $100k each year, per individual, so filing Married Joint you are allowed up to $200k.

I recommend that you contact the custodian of your IRA(s) for information to make a QCD from your account.

TomG

We are experienced with the QCD and use them do most of our charitable contributions now. My question is about the new rules for using a QCD to establish a Charitable Gift Annunity, not a normal QCD, which is a straight gift to the charity, with no Annunity involved.

[Deleted User]

Changes made under SECURE 2.0 include:

Added a deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity. For 2024, this limitation is increased to $53,000, up from $50,000.

Here is the link to that information.

https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

It is my understanding that it is per individual per year, but as we are not financial advisors, I would reiterate what the last agent suggested and contact the custodian of your IRA for more information.

KeriC

There isn't a lot of information from the IRS regarding CGAs since this is a fairly new tax law.

The most comprehensive source I have located can be found at:
https://www.acga-web.org/new-charitable-planning-opportunities-with-retirement-plans

TomG

https://community.freetaxusa.com/discussion/comment/848#Comment_848

Thank you, very helpful.