If you are having to deal with a Required Minimum Distribution from your IRA and want to avoid some tax, here is way. If you are over 70 ½ and you have traditional IRA, you can direct all or part of the distribution be paid directly to the Museum in the form of a Qualified Charitable Distribution. This only applies to traditional IRAs, not Roth, Simple, or SEP.
The maximum allowed each year is $100,000.00 per taxpayer. The mechanics of the transaction is you direct the IRA custodian to issue and mail a check to the Museum. You cannot receive the funds. You must get an acknowledgement or receipt for tax purposes.
The acknowledgment or receipt must meet these tests:
- It must be written.
- It must include the amount of cash you contributed and whether the Museum gave you any goods or services as a result of your contribution (other than certain token items and membership benefits.)
The 1099 will be issued under your social security number by your IRA custodian. You will have to note on your tax return that you made a Qualified Charitable Distribution and match the dollar figure to the receipt.
As in any tax transaction, please consult your tax adviser first.