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qualified charitable distribution (QCD) from your IRA

If you are over 70 ½ and must make a Required Minimum Distribution (RMD) from your IRA, you may want to consider making your gift to The Prep this year through a Qualified Charitable Distribution (QCD) instead of paying the fedral tax that would otherwise be due.

As an IRA owner at least 70 ½ years old, one has a Required Minimum Distribution (RMD) obligation for the year. Making a Qualified Charitable Distribution (QCD) to Seton Hall Prep could satisfy your Required Minimum Distribution (RMD). By giving all or part of your Required Minimum Distribution (RMD)to Seton Hall Prep as a Qualified Charitable Distribution (QCD), it would therefore not be taxable as it otherwise would have been.

For example, if alumnus Michael Smith who graduated from The Prep in 1963 just turned 71 years old and he has an IRA with a $152,000 account balance. His Required Minimum Distribution (RMD) for the current year is $5,736. If Michael makes a $5,000 Qualified Charitable Distribution (QCD) to Seton Hall Prep with these Required Minimum Distribution (RMD) dollars, it will satisfy $5,000 of his Required Minimum Distribution obligation without any tax liability!  This leaves Michael with only another $736.00 to distribute (and report in income for tax purposes).

Continuing the prior example, if Michael instead made a $6,000 Qualified Charitable Distribution (QCD) from his IRA to Seton Hall Prep, his entire Required Minimum Distribution (RMD) will be satisfied (as his QCD is more than enough to cover the RMD obligation), and again there will be no tax consequences to the entire QCD.

For more information about a Qualified Charitable Distribution from your IRA to satisfy your Required Minimum Distribution (RMD), please contact Matthew Cannizzo, Director of Institutional Advancement at mcannizzo@shp.org or at (973) 736-6861.

SETON HALL Preparatory School

120 Northfield Ave, West Orange, NJ 07052     |     Main Phone:  973.325.PREP [7737]

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