Age 70.5–removing IRA money

[iris lilies]

I’m starting a new thread because I don’t want people to have to wade through very old posts on this narrow topic.

I talked to Vanguard today about the mechanics of removing money from my IRA and giving it to a qualified charity. In a few months I will be able to take money from my IRA without incurring a taxable event and give to qualified charities.

The Vanguard representative described the process:

1. I let Vanguard know the amount I want to take out for each charity, name the charity, and name the fund I am taking it from in my account.

2. Vanguard sends checks to my home via snail mail, made out to each charity in the amount I have detailed.

3. I need to take photocopies of the checks for my tax records because Vanguard will send me a 1099 that is NOT detailed showing the distribution going to qualified charities.

4. I need to submit those photocopies to our tax preparation firm so as to not be charged a tax.

5. I mail the checks to the charities myself, sending a note however I like so that it’s obvious to them where the money is coming from.

[Tybee]

I’m starting a new thread because I don’t want people to have to wade through very old posts on this narrow topic.

I talked to Vanguard today about the mechanics of removing money from my IRA and giving it to a qualified charity. In a few months I will be able to take money from my IRA without incurring a taxable event and give to qualified charities.

The Vanguard representative described the process:

1. I let Vanguard know the amount I want to take out for each charity, name the charity, and name the fund I am taking it from in my account.

2. Vanguard sends checks to my home via snail mail, made out to each charity in the amount I have detailed.

3. I need to take photocopies of the checks for my tax records because Vanguard will send me a 1099 that is NOT detailed showing the distribution going to qualified charities.

4. I need to submit those photocopies to our tax preparation firm so as to not be charged a tax.

5. I mail the checks to the charities myself, sending a note however I like so that it’s obvious to them where the money is coming from.

Thank you for this. I was just looking this up today because I wanted to take shares from my IRA and put them in my donor fund, and it said I could not do it that way; I had to take them from my regular brokerage account. I think it is because I am not 70 1/2 yet.

[Tybee]

Why not set up a donor advisor fund? That way, you just switch the money to the daf, and then they do all the work--I just put what I want it to go to, and they send the letter and the checks, etc. I love mine. And when I die, it gets split between the two beneficiaries, my college and a college I donate to in South Dakota. It happens automatically, no probate. And I can change the beneficiaries at any time, so no need to write a new will.

For Vanguard:
Home | Vanguard Charitable (https://www.vanguardcharitable.org/)

[iris lilies]

Why not set up a donor advisor fund? That way, you just switch the money to the daf, and then they do all the work--I just put what I want it to go to, and they send the letter and the checks, etc. I love mine. And when I die, it gets split between the two beneficiaries, my college and a college I donate to in South Dakota. It happens automatically, no probate. And I can change the beneficiaries at any time, so no need to write a new will.

For Vanguard:
Home | Vanguard Charitable (https://www.vanguardcharitable.org/)

I don’t see any advantage to me to put it into a donor advised fund. As I understand it, once the money is in that fund it will always be controlled by Vanguard. That’s not what I want to happen.

I do not mind mailing the checks to the charitable organization, in fact,I want to include my own note.

But I would think there’s going to be a cost to Vanguard cutting these checks and mailing them to me. The person I talked to on the phone said there’s a $25 fee if they take the information by phone but there’s an online method for me to convey the information. But, there’s gotta be a cost them to cut the checks and mail them to me. We shall see. I doubt that cost is going to discourage me from doing it.

[Tybee]

I don’t see any advantage to me to put it into a donor advised fund. As I understand it, once the money is in that fund it will always be controlled by Vanguard. That’s not what I want to happen.

I do not mind mailing the checks to the charitable organization, in fact,I want to include my own note.

But I would think there’s going to be a cost to Vanguard cutting these checks and mailing them to me. The person I talked to on the phone said there’s a $25 fee if they take the information by phone but there’s an online method for me to convey the information. But, there’s gotta be a cost them to cut the checks and mail them to me. We shall see. I doubt that cost is going to discourage me from doing it.

With mine, once I move the money over, it belongs to my donor advised charitable fund and not me anymore, but I control how it is spent, and I select how to invest it, from certain preset options. So I am in a growth fund, and I decide to donate, as I did today, and I enter the information about where it goes, and they do the rest. So yes, I can't write a handwritten note although I can probably customise the letters that get sent.

But there is no fee for them to send out the grants. I give them instructions and they carry them out.

But I can see how you might want a more personal touch. I just know that this way, it will all get donated, and all I have to do is decide where and when. And it's not a chore, and I enjoy using it.

[nswef]

I have run into the problem that there is no note on the sent check to say who is is from...So I need to tell the broker to be sure it is on the check they send. I think they have a 3rd party doing the distribution and that's the problem.

[iris lilies]

I have run into the problem that there is no note on the sent check to say who is is from...So I need to tell the broker to be sure it is on the check they send. I think they have a 3rd party doing the distribution and that's the problem.
Thanks for saying this this because I knew I’d read it somewhere and now probably from you that the broker sent the money but the charitable organization didn’t know who it came from. That was one of my reasons for maintaining control over it.


I do think I will find out that that “control “costs a dollar amount but that’s fine with me.

[Tybee]

Thanks for saying this this because I knew I’d read it somewhere and now probably from you that the broker sent the money but the charitable organization didn’t know who it came from. That was one of my reasons for maintaining control over it.


I do think I will find out that that “control “costs a dollar amount but that’s fine with me.


That is odd, that that happened to you, nwsef. I get copies of everything they send (use Schwab) and have never had any problems, and even though it's a daf, the thank you notes come to my address and acknowledge. So I can just go to my account and see exactly what was sent, and it's always got the name of my fund on it, in the granting letter. Maybe the organization separated the check from the granting letter? I haven't actually seen the checks. Hmm.

[sweetana3]

Our Charles Schwab IRA sends separate 1099s for the QCD amount(according to hubby who handles this). Not sure why Vanguard does not do the same thing. We have a checkbook for each of us to use to send donations to our organizations from our IRA accounts.

[Tybee]

Our Charles Schwab IRA sends separate 1099s for the QCD amount(according to hubby who handles this). Not sure why Vanguard does not do the same thing. We have a checkbook for each of us to use to send donations to our organizations from our IRA accounts.

That's cool, and sounds easy.

[iris lilies]

Our Charles Schwab IRA sends separate 1099s for the QCD amount(according to hubby who handles this). Not sure why Vanguard does not do the same thing. We have a checkbook for each of us to use to send donations to our organizations from our IRA accounts.

Yes, it’s too bad that Vanguard does not do what Schwab is doing.


I do have a checkbook for my Wells Fargo account, but it’s not wise to take money out of the Roth there. Soon, I won’t have to do that reaching age 70.5.

[iris lilies]

Our Wells Fargo representative mentioned this tip about charitable donations: send them earlier in the year rather than later because they need to be deposited by December 31 for them to qualify as “ no tax” monies taken from IRA’s.

that’s good tip because I know some of the small organizations I support take forever to deposit a check.

[iris lilies]

Thank you for this. I was just looking this up today because I wanted to take shares from my IRA and put them in my donor fund, and it said I could not do it that way; I had to take them from my regular brokerage account. I think it is because I am not 70 1/2 yet.
I dont know about being 70.5.

Today the representative from Vanguard Charitable organization said I could not transfer IRA money to a Donor Advised fund.
I didnt want to do that, but it came up in discussion. The Vanguard Charitable Organization deals only and exclusively with donor advised funds.

i dont have nor want a Donor Advised fund because all my giveaway money is in an IRA.
.

[Tybee]

I dont know about being 70.5.

Today the representative from Vanguard Charitable organization said I could not transfer IRA money to a Donor Advised fund.
I didnt want to do that, but it came up in discussion. The Vanguard Charitable Organization deals only and exclusively with donor advised funds.

i dont have nor want a Donor Advised fund because all my giveaway money is in an IRA.
.

Interesting that Vanguard told you that. I found this on donorstrust.org and I'm now really confused--I'm not sure what this means:
"If you are at all familiar with the benefits of donor-advised funds, you likely already know that they are very helpful in simplifying the back-end work of giving for you, from vetting organizations to check-writing. Unfortunately, you cannot make a QCD for the purpose of funding a DAF account (a distribution from an IRA for the purpose of funding a DAF account is not considered a qualifying distribution).
However, since one of the major benefits of Qualified Charitable Distributions no longer exists, do you really need to make a QCD?
If you like the convenience of using a DAF account, why not consider skipping the QCD, take the distribution directly, then give it to your DAF sponsoring organization to fund your DAF account?
Although you can’t fund a DAF account with a QCD, a gift for the purpose of funding your DAF account still qualifies for the charitable income tax deduction. So, as long as the amount you contributed to your DAF account does not exceed 60 percent of your AGI, there is a good chance your tax liability will be the same whether you take advantage of the QCD or simply fund your DAF account and forgo the QCD."

who knows? I'll check with Schwab when the time comes.

[iris lilies]

Interesting that Vanguard told you that. I found this on donorstrust.org and I'm now really confused--I'm not sure what this means:
"If you are at all familiar with the benefits of donor-advised funds, you likely already know that they are very helpful in simplifying the back-end work of giving for you, from vetting organizations to check-writing. Unfortunately, you cannot make a QCD for the purpose of funding a DAF account (a distribution from an IRA for the purpose of funding a DAF account is not considered a qualifying distribution).
However, since one of the major benefits of Qualified Charitable Distributions no longer exists, do you really need to make a QCD?
If you like the convenience of using a DAF account, why not consider skipping the QCD, take the distribution directly, then give it to your DAF sponsoring organization to fund your DAF account?
Although you can’t fund a DAF account with a QCD, a gift for the purpose of funding your DAF account still qualifies for the charitable income tax deduction. So, as long as the amount you contributed to your DAF account does not exceed 60 percent of your AGI, there is a good chance your tax liability will be the same whether you take advantage of the QCD or simply fund your DAF account and forgo the QCD."

who knows? I'll check with Schwab when the time comes.

ok, since I was talking to the Donor Advised Fund arm of Vanguard, she said they only deal with donor advised accounts. Maybe she didn’t know, or maybe I misunderstood, how money gets into those accounts and that IS possible to transfer from an IRA.

But I still have no interest in doing that. The only reason I called this DAF arm is because I couldn’t remember how I filled out their donor form a week ago and I was frustrated. Well it turns out I was on the wrong website. I needed to be on the Vanguard proper website.

[Tybee]

ok, since I was talking to the Donor Advised Fund arm of Vanguard, she said they only deal with donor advised accounts. Maybe she didn’t know, or maybe I misunderstood, how money gets into those accounts and that IS possible to transfer from an IRA.

But I still have no interest in doing that. The only reason I called this DAF arm is because I couldn’t remember how I filled out their donor form a week ago and I was frustrated. Well it turns out I was on the wrong website. I needed to be on the Vanguard proper website.

It's great to get these reports on how to give charitably with RMD's. We are all learning.

[iris lilies]

I had ordered four checks from Vanguard for charitable donations. They all arrived today each in a separate envelope. I wondered if they had a mechanism to consolidate them into one envelope for a customer or if they each be mailed separately. Now I know.

Each check does have my name on it and that it’s made out to the charity in this way:

The Elephant Sanctuary
From Iris Lilies
Address of Iris Lilies

so a charitable organization, if they were paying attention, could know where the check came from without a note from me, but I don’t know if their little intern who opens mail would be paying attention.

[littlebittybobby]

okay----go ahead and open a account with my "junk car zero return fund" and i will safely invest that dough where it is secure from you kids pixxing it away(as they say up there in nowhere), on trips and restaurant meals. Yup. Minimum investment is only 10k. Yup. hope that helps you kids some.

[rosarugosa]

okay----go ahead and open a account with my "junk car zero return fund" and i will safely invest that dough where it is secure from you kids pixxing it away(as they say up there in nowhere), on trips and restaurant meals. Yup. Minimum investment is only 10k. Yup. hope that helps you kids some.

:laff::laff::laff:

[Tybee]

Hey, IL, came across this and thought you might find it helpful, too:

How to Make a Tax-Free Charitable Donation From Your IRA | Morningstar (https://www.morningstar.com/personal-finance/how-make-tax-free-donation-your-ira)

[iris lilies]

Hey, IL, came across this and thought you might find it helpful, too:

How to Make a Tax-Free Charitable Donation From Your IRA | Morningstar (https://www.morningstar.com/personal-finance/how-make-tax-free-donation-your-ira)

yes, this is a very good article. Rather than bookmark it and then forget forget about it, I hope I remember it is listed in this thread.

Further into the article it talks about taking RMDs and QCDs at the same time. That makes my head spin and I can’t follow it, but I wouldn’t need to follow it for sometime. I don’t think I will be doing QCDs after I am eligible for RMDs anyway.