Dan Celia

Financial Issues

April 2016 – Q: Can I make a withdrawal from my IRA and use it for a charitable gift without paying tax?

A: If you are 70½, you can use your Minimum Required Distribution up to $100,000 for charitable giving. It’s the only way I know of taking money from your IRA account tax free. And now, there is permanent extension of this benefit.

However, there are two considerations: 1) The check to your church or ministry must come directly from the financial institution where you have your IRA; 2) The gift does not qualify as a charitable deduction, since you have never paid tax on it.

I recommend using your MRD to make a tax-free, one-time-a-year gift. It saves you from paying taxes on the money, and your church or ministry gets the benefit of receiving it in a lump sum, which is always helpful in their planning.

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Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).

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