Donor Adviser Funds and Qualified Charitable Distributions

Donor-Adviser Funds:

A donor-advised fund, or DAF, is like a charitable investment account for the sole purpose of supporting charitable organizations you care about. 

When you contribute cash, securities, or other assets to a donor-advised fund at a public charity or the charitable arm of a brokerage firm, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth, and you can recommend grants to any eligible IRS-qualified public charity.

You want your charitable donations to be as effective as possible when you give. Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.

It's easy to send funds to the Fayette Regional Humane Society from your DAF.


Qualified Charitable Distributions

A qualified charitable distribution (QCD) is a distribution from your individual retirement account to a qualified charity. You must be age 70½ or older to make a QCD. A qualified charitable distribution is not taxed, nor is it included in your taxable income.

In addition to the benefits of giving to charity, a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact of certain tax credits and deductions, including Social Security and Medicare.

Also, QCDs don't require that you itemize, which due to the recent tax law changes, means you may decide to take advantage of the higher standard deduction, but still use a QCD for charitable giving.

The maximum annual QCD amount is $105,000 (index adjusted annually).

The distribution must be made directly to the charity.


Please contact your lawyer or financial advisor for more information.



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