Question

jaden (single) has a traditional ira to which he has made only deductible contributions. at the end of 2022, jaden is 74 years old. jaden's required minimum distribution (rmd) from his ira for 2022 is $7,400. before considering the rmd, jaden's agi is $124,000. jaden does not itemize deductions. required: what is jaden's agi if jaden receives the rmd and donates the $7,400 distribution proceeds to a qualifying charity? what is jaden's agi if jaden directs the ira trustee to transfer the $7,400 distribution directly to a qualifying charity as a qualified charitable donation (qcd)? true or false. based on the information provided, jaden's taxable income is the same whether he makes a qcd or not. explain.

Answer 1

Jaden's AGI would be $116,600 if he donates the RMD proceeds to a qualifying charity, and $124,000 if he makes a Qualified Charitable Donation (QCD). Making a QCD would result in a lower taxable income for Jaden.

Step-by-step explanation:

Jaden's AGI if he receives the RMD and donates the $7,400 distribution proceeds to a qualifying charity would be $116,600. This is calculated by subtracting the RMD ($7,400) from the original AGI ($124,000).

On the other hand, if Jaden directs the IRA trustee to transfer the $7,400 distribution directly to a qualifying charity as a Qualified Charitable Donation (QCD), his AGI would remain unchanged at $124,000. This is because the QCD is excluded from Jaden's taxable income for the year.

The statement that Jaden's taxable income is the same whether he makes a QCD or not is false. Making a QCD would result in a lower taxable income for Jaden.