Consider a Qualified Charitable Deduction

Recently, one of our members asked if the USSSA Foundation qualified as a charitable organization for purposes of being a recipient of a Qualified Charitable Deduction (QCD), an option open to a taxpayer 72 years of age or older who withdraws money from an IRA (must be an IRA and not a 401K or the Thrift Savings Plan) to be donated to a qualified charity.  

The advantage of a QCD is that it is subtracted that tax year from the individual’s Required Mandatory Distribution (RMD) and reduces their Adjusted Gross Income (AJI) by the amount of that donation. The AJI can impact either the eligibility for or cost of certain federal programs (e.g., the cost of Medicare B.) In essence, it is the only way an individual who does not itemize their tax return can reduce their AGI with a charitable contribution.

Our lawyer advised the member that USSSA as a 501(c)(6) would not qualify; however, the Foundation is a 501(c)(3) charitable organization. A QCD can be made to the Foundation.

The member withdrew money from his IRA with Vanguard and received a check in the mail payable to Foundation of USSSA in care of the member’s name and home address. The member signed the check, mailed it to USSSA, 6919 Vista Drive, West Des Moines, IA  50266, and we deposited it to the Foundation’s account, thereby completing our first QCD.

Here is really good article about QCDs:

Hopefully, this information will be of assistance to members over the age of 71 who wish to make a donation to our Foundation.