Labj Stock Index: May 19th

Are qualified non -profit distributions always the best tax -saving step?

Qualified non -profit distributions (QCDs) have become a popular way to unlock the tax savings of philanthropic gifts. For people with a high network value, however, there may be no option to give away the QCDs from a single pension account (IRA).

Gift securities are a more effective method for people who set up deductions.

Here you can find out how you know which strategy best suits your circumstances.

Publicly traded donors: efficiency and optionality

The donations of publicly traded stocks-especially if the basis at the time of the gift is very low, is generally the most tax-efficient donation method.

When laying qualified, valued stocks, a share that is usually held for more than a year, you will receive an income tax deduction that is based on the at the time of the assets donated and does not have to pay capital gains tax on the undeveloped increase in value of this financial value.

QCDS: Giving streamlined giving by IRAS

QCDs have become very popular with pensioners to donate directly from Iras, which may reduce the necessary minimum releases (RMDS).

Since QCDs come directly from IRA distributions or RMDs, they effectively serve as an adaptation to the total income. The reduction of the total income in this way is valuable, since the total income is the starting point for the calculation of the AGI, the reduction of which benefits taxpayers or is subject to, versions, deduction limits or exposure to net investment tax – all determines on the basis of the AGI of a taxpayer.

QCDs are not always the best way to give

The additional tax savings associated with QCDs do not exceed those of a donation with estimated securities. In view of the threshold values ​​and potential tax savings, this applies in particular to pensioners with a high network and ultra -high networks.

In addition, it is not a binary decision to finance non -profit gifts from long -term estimated securities in a taxable portfolio compared to QCDs from an IRA. Depending on the appetite and capacity, these strategies can be used to donate charity in concert each year.

Relocation to a deliberate donation strategy

The deduction from a reactive strategy requires a deeper conversation about the non -profit priorities of your family. A JP Morgan team can offer sensible insights and support so that you and your family can achieve your desired philanthropic goals. You should also talk to your tax advisor about which actions are suitable for you.

Rick Barragan is the managing director.
Los Angeles Market Manager for the JP Morgan Private Bank.
[email protected] | (310) 860-3658
Privatbank.jpmorgan.com/los-angeles

Source: “Are qualified non -profit distributions always the best tax -saving step?”, By Adam Ludman, head of the tax strategy, and Tom Lenkiewicz, WEATH strategist, May 8, 2025