IRA

The Come Back of "Qualified Charitable Distributions"

January 17, 2013
By: Chin Kim

Find out more about ATRA and how one can make a 2012 QCD.

Periodically during 2012, we were contacted by advisors asking if clients can still send their 2012 RMDs amounts to a charity of their choice as qualified charitable distributions (QCD). And the answer was "No, it ended as an option as of 2011...but, that has been changed due to recent tax law changes."

Part of the recent passage of American Taxpayer Relief Act of 2012 (ATRA) was the extension of qualified charitable distributions (QCD) for 2012 and 2013. You might ask, "Since the ATRA was passed after 2012; how can one make a 2012 QCD?"

The act allowed for the following:

  • Option  1 - Taxpayers are permitted to treat any portion of their RMDs received from their IRA during December 2012 as a QCD. One must transfer the cash of the distribution directly to the eligible charity before February 1, 2013.
    • Caution: If one selects this option, do not send the RMDs back to the IRA provider. Instead, the amount (i.e. no more than $100,000) should be paid directly to the eligible charity.
  • Option 2 - Taxpayers may elect to have RMDs made during January 2013 be treated as if it were made on December 31, 2012.
    • Caution: If one selects this option, you must work with the IRA provider to send the payment directly to the eligible charity before February 1, 2013.

Procedures on how to claim this option on 2012 tax forms were recently released on the IRS website.

If you have any questions about this or other ATRA changes, please feel free to contact Retirement Strategies Group at (800)722-2333, ext. 3939, or e-mail us at RSG@PacificLife.com.

Picture of Chin Kim

Chin is currently an Assistant Vice President of Regulatory Compliance in the Retirement Solutions Division at Pacific Life. Previously, he led the Retirement Strategies Group, as Assistant Vice President in the Retirement Solutions Division at Pacific Life. His core responsibilities included sharing and supporting retirement strategies concepts through development of marketing materials and tools and leading the team members in the field and in the home office.

Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. 

Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.

No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency