Charitable donations from IRA's Also known as QCD question for 2015

[nwtaxlady]

Can a taxpayer make a qualified charitable contribution from their IRA to the Charity for 2015? A QCD what they refer it as. So they decided at the last minute to allow it for 2014. Did it include for future years? It doesn't look like it to me. So that said, do we know what will happen for 2015 does it look like it will be extended for 2015?

I have a client that would like to do this.... but of course we need answers. Anyone have any insight on this or have clients in the same boat?

Thanks!

[kathyc2]

Can a taxpayer make a qualified charitable contribution from their IRA to the Charity for 2015? A QCD what they refer it as. So they decided at the last minute to allow it for 2014. Did it include for future years? It doesn't look like it to me. So that said, do we know what will happen for 2015 does it look like it will be extended for 2015?

I have a client that would like to do this.... but of course we need answers. Anyone have any insight on this or have clients in the same boat?

Thanks!

The client CAN make the direct contribution from IRA for 2015, but at this point we don't know if it will bypass AGI as in past years or only count as a Schedule A deduction. It's been extended a number of years, so IMO the likelihood of being extended again is decent. Congress has not passed the tax extenders until December for the last few years and a couple years ago they even went to Jan of following tax year.

Would your client donate the amount regardless of QCD, or is the donation dependent on it? If they would donate the amount anyway there is no drawback to running the donation through the QCD. If not extended they would just count it on Schedule A same as if they wrote a check. If the donation is dependent on if it is extended, they will just need to hold tight a few months.

[nwtaxlady]

That is a possibility that I will present to the client and....

Thanks Kathy, I think that is a good option to present to my client. She also has some Stock that has gone up in value quite a bit. Their estimated AGI for 2015 (MFJ) is about $156,000. She will have a RMD starting in 2016 about $50,000. So then for 2016's AGI looking at about $206,000. They do have some appreciated stock that they would like to donate to a Qualified Charitable Organization. The FMV of the Stock now is about $35,000 with only cost basis of about $14,000.

So what would be ideal tax situation? Make a QCD of X amount now and gift some of the stock and sell some of the stock in 2015? The stock company is being bought out by another company and will be given cash. We just don't know when. So thinking of donating some of that stock to relieve the LTGC.

Any suggestions?
Thanks.

[kathyc2]

Where the QCD is really beneficial for federal return is at lower income levels where it can make less SS taxable, where TP itemized deductions w/o charity are too low to be beneficial, and to reduce the % of AGI items like medical and misc itemized. You'd want to run the numbers to make sure, but if MFJ it may not make any difference on with income of 150K to bypass AGI or just take as charitable deduction. It may make a difference on the state, according to how your state handles QCD and charitable deductions.

Seems like they would be better off bypassing the 20k stock gain, but again you'd need to run the actual numbers to make sure.