Year-End Deadlines and Reminders for 2023

For those who are charitably inclined and/or are subject to Required Minimum Distributions (RMD), it is important to note that the year-end deadline is just around the corner. LPL has given us a deadline of Friday, December 8th to guarantee performance of time sensitive year-end instructions, including execution of required minimum distribution (RMD), qualified charitable distributions (QCDs) and gifting of appreciated securities. 

Any paperwork received after LPL's December 8th deadline will be handled on a "best efforts" basis. Please contact your primary relationship manager as soon as possible to make arrangements.

What is RMD?

Required minimum distribution (RMD) is the amount of money that must be taken out of an individual’s retirement account each year so that the IRS can collect tax on these monies, which has been growing tax deferred. RMD applies annually to those age 73 and older, as well as most beneficiaries who have inherited IRA accounts. Owners of retirement accounts who are subject to RMD must withdraw annually starting in the year they reach 73. For example, if you turn 73 at the end of December, you may be subject to RMD. Those who miss taking their RMD are subject to penalties. 

What is a QCD?

A qualified charitable distribution, also referred to as a QCD - is a tax free distribution of taxable assets from a traditional IRA or beneficiary IRA paid directly to a qualified charity. A QCD can be beneficial to you by allowing you to make charitable donations from your individual retirement account (IRA) without including the distribution as taxable income and by potentially reducing your overall tax liability. This can provide a tax-efficient way for you to support the organizations you care about.

Qualified Charitable Distribution Rules

  • For eligible tax years, individuals age 70 1/2 or older can exclude up to $100,000 from gross income for donations paid directly to a qualified charity from their IRA.
  • The donation counts towards any IRA required minimum distributions for the year.
  • The amount excluded from gross income isn’t deductible.
  • Married individuals filing a joint return may exclude up to $100,000 donated from each spouse’s own IRA.

Gifting of Appreciated Securities

Did you know that you can also accomplish your charitable giving through gifting of appreciated securities? You can execute this strategy at any age. This concept refers to the act of donating appreciated stocks, bonds, or other investment assets to a charitable organization. This method of philanthropy allows individuals to support their chosen nonprofit, while potentially enjoying the tax benefits. When you gift appreciated securities, you transfer ownership of the assets to the charity, which can then sell them without incurring capital gains taxes. This benefits the charitable cause and also allows the donor to reduce their taxable income and potentially maximize the value of their contribution compared to donating cash. In essence, gifting appreciated securities is a tax-efficient way to make a meaningful impact on the causes you care about.

If you have any specific questions about RMD or would like to discuss your own charitable giving, investment strategy or financial planning needs, we welcome you to Contact Us to set up a mutually convenient date/time to speak.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.