Thanks to the Dallas Foundation for this Case of the Week:
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Ralph is a retired investment advisor. He watched his IRA blossom and grow through good investments. It now was the largest asset in his estate. Based on his age of 79 and the increased value, his required distribution this year was nearly $100,000!
Ralph is a frequent volunteer for his favorite charity and wants to make a major gift to a special project. In October, he decided that he did not actually need the distribution for this year. With the growth of his IRA, it was logical to make the gift from his IRA. But how can this work? Is this a good tax planning strategy?