Los Amigos is able to receive donations of securities by direct transfer from a donor’s account.  Donating highly-appreciated securities, including stocks, bonds, or mutual funds, allows a tax deduction of the full fair market value of the securities without being subject to federal capital gains taxes.  In addition, many large U.S. corporations have programs to match the value of donated securities through organizations such as Benevity, Inc.
 
The Protecting Americans from Tax Hikes Act of 2015 made the Qualified Charitable Distribution (QCD), sometimes called the IRA Charitable Rollover, a permanent part of the Internal Revenue Service Code.  This provision allows individuals who are aged 70.5 or older to make direct transfers totaling up to $100,000 per year to 501(c)(3) charities, like Los Amigos, without having to count the transfers as income for federal income tax purposes.  The transfers, in the form of cash or securities, must come from either a traditional or Roth Individual Retirement Account (IRA).  If the retirement assets are held in a 401(k) or similar account, the funds must be first rolled into an IRA.
 
For individuals required to take required minimum distributions (RMD) from a tax-deferred retirement account, a QCD can be counted toward satisfying the RMD and the funds donated are excluded from federal taxable income.  A QCD is a particularly attractive way to make donations of highly-appreciated securities without being subject to federal income taxes.  Moreover, because a QCD is not reported as a deduction, the amount of a QCD is not counted against charitable deduction limitations.
 
Contact your tax professional to learn more about the QCD and other ways to make charitable donations while reaping federal and state tax benefits.  For more information or to set up a securities donation, please email Los Amigos Board Treasurer Larry Icerman.