QCD Charitable Strategy
A qualified charitable distribution may let you give directly from an IRA, potentially satisfying RMDs while excluding the amount from income — often more efficient than a cash gift.
At a glance
- Category
- Charitable
- May be relevant for
- Charitably inclined retirees over 70½
- Our approach
- Document review → proposal → implementation
- Service area
- Nationwide (office in Westlake Village, CA)
Whether this applies to you depends on your specific facts and circumstances.
Ask a CPA about your situationImportant: This page is for educational purposes only. It describes how this strategy may work under current law. Whether it is appropriate for you, and how to implement it correctly, depends entirely on your specific facts, timing, and documentation. This is not individualized tax advice. Speak with a licensed CPA before acting.
How it may work
QCD Charitable Strategy — a plain-English overview
The sections below describe how this strategy works under current tax law, what conditions may make it applicable, and what factors affect the outcome.
What a QCD is and who qualifies
A qualified charitable distribution is a direct transfer from a traditional IRA to a qualifying public charity, made from an IRA holder who is age 70½ or older. The transfer is excluded from gross income — up to $105,000 per person per year (indexed; limit adjusted after 2023). It does not flow through income and then be deducted — it simply does not appear as income. For non-itemizers — the majority of taxpayers after the 2017 TCJA raised the standard deduction — this is often more tax-efficient than a cash gift.
The RMD interaction
QCDs may count toward satisfying required minimum distributions. For those who are charitably inclined and have IRA balances generating RMDs, a QCD may satisfy the RMD obligation without increasing taxable income. Because RMDs can push Social Security taxation higher, affect IRMAA thresholds, and reduce eligibility for certain deductions or credits, keeping a distribution out of MAGI through a QCD may have cascading benefits beyond the charitable deduction itself.
The non-deductibility and basis point
Because a QCD is excluded from income, it cannot also be taken as a charitable deduction. The two benefits do not stack. If you have non-deductible (basis) IRA contributions tracked on Form 8606, QCDs must be coordinated carefully — pre-tax amounts are excluded from income as a QCD; basis amounts are not included in income regardless. The ordering rules matter.
Document-first
What we'd review before recommending this strategy
We do not guess. We review the documents, propose, and implement. Here is what we'd want to see to evaluate whether this strategy may apply to you.
- Age at time of distribution — must be 70½ or older for QCD eligibility
- IRA type — QCDs may be made from traditional IRAs; inherited IRAs also qualify; ongoing SEP and SIMPLE IRAs do not
- Qualified charity status — must be a §501(c)(3) public charity; donor-advised funds do not qualify
- RMD amount and timing — to determine how much of the RMD can be satisfied via QCD
- Form 8606 basis tracking — to coordinate pre-tax and after-tax IRA balances
- Total charitable giving plan — QCDs vs. appreciated stock vs. donor-advised funds vs. cash, depending on the situation
Who this may fit
Profiles where this strategy comes up most
These are the client situations where we most commonly evaluate this strategy. Whether it applies to you depends on your specific facts.
Common Questions
Questions about QCD Charitable Strategy
Educational answers to questions we often hear when discussing this strategy with clients.
Can a QCD be made to a donor-advised fund?
No. IRS rules explicitly exclude donor-advised funds, supporting organizations, and private foundations from receiving QCDs. The distribution must go directly to a qualifying public charity.
What if the distribution exceeds the RMD?
QCDs may exceed the RMD amount — up to the $105,000 annual limit — and the excess is also excluded from income. The excess QCD amount cannot be carried over to future years. Any amount distributed from the IRA above the QCD limit and not directed to charity is taxable income.
Educational content only
This page describes QCD Charitable Strategy for general educational purposes under current tax law. It is not individualized tax, legal, or investment advice. Whether this strategy is appropriate for you — and how it should be structured, documented, and reported — depends entirely on your specific facts, timing, and circumstances. Tax law changes frequently. Always consult a licensed CPA before acting on any information here.
We do not guess. We review the documents, propose, and implement.
Ask a CPA
Wondering if QCD Charitable Strategy applies to you?
Tell us about your situation and we'll follow up within one business day. We review the actual documents and give you a direct answer — no obligation.
- Document-first review — we start with your actual returns and records
- Clear explanation of what may apply and why
- No obligation — honest if there isn't enough value to act on
Explore more
Other Charitable strategies
Ready to find out what applies to your situation?
A discovery call is how we start. We review the documents and tell you honestly what may be worth pursuing.