Question

Pablo is 75 years old. He made a $5,000 qualified charitable distribution (QCD) from his IRA to a qualified local charity. If he uses the cash method of accounting, what amount of the distribution can he claim as a charitable contribution deduction on his income tax return

Answer 1

$5,000

Step-by-step explanation:

People over 70.5 years old can donate up to $100,000 to charities from their IRA accounts. Some people do this to avoid penalties for not taking the required minimum distributions (RMD start at age 72) and it also helps them to lower their taxable income. This deduction applies to all types of tax payers, not only wealthy ones.