Canadian land trusts – Share this bulletin with your U.S. Supporters.
The new U.S. tax law that went into effect on January 1, 2018 limits itemized deductions making it more difficult to lower your income taxes by making charitable gifts. But there is still an opportunity for you to help American Friends conserve places you love in Canada while also reducing your U.S. taxes. If you have an Individual Retirement Account (IRA) and are over the age of 70 1/2, you can donate to American Friends using funds in your IRA, and avoid tax on the Required Minimum Distribution (RMD) from your tax-deferred retirement account.
Your RMD is the minimum amount you must withdraw from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account each year. Your withdrawals will generally be included in your annual taxable income.
A Qualified Charitable Distribution (QCD) is an otherwise taxable distribution that is paid directly from your IRA to a qualified charity, such as American Friends. You can satisfy all or part the amount of your RMD by making a QCD, while not adding to your taxable income. You can exclude up to $100,000 a year of distributions.
Your QCD will save natural lands in Canada for future generations while potentially providing additional tax benefits by lowering your overall adjusted gross income (AGI). Possible positive financial results include:
- Reducing or eliminating tax on social security benefits
- Lowering capital gains tax rates
- Increasing amount of deductible medical expenses
- Minimizing the net investment tax
- Avoiding higher Medicare Part B premiums.
Talk to your tax professional to create a Qualified Charitable Distribution strategy to reduce your taxes and support American Friends and its Canadian partners. As always, you can request that American Friends use your contribution to make a grant to one of our qualified partner organizations.
Contact Sandra Tassel, Program Coordinator, American Friends of Canadian Conservation (360) 515-7171, firstname.lastname@example.org, for more information about how to invest in Canada’s wild places.
Thanks to Gail Kruk (CPA, CGA), a cross-border tax specialist with Larson Gross, in Bellingham WA. (360) 734-4280, email@example.com.