medium · Certified Financial Planner Psychology
A donor in the Patel household, currently in the 35% tax bracket, is 72 years old and must take a Required Minimum Distribution (RMD) from her IRA. She wants to give $100,000 to a public charity.
Following Heuristic H3 (Exhaust the Free), which strategy is most efficient?
- Wait until the following tax year to group two years of RMDs into one larger charitable gift.
- Take the full RMD as taxable income and then write a check to the charity to claim an itemized deduction.
- Execute a Qualified Charitable Distribution (QCD) directly from the IRA to the charity.
- Gift appreciated stock from a brokerage account and use the IRA RMD for living expenses.
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