This article was originally posted on Smart Money by an author unaffiliated with Capital Investment Advisors.  

If you've reached 70-1/2, you can make cash donations to Internal Revenue Service-approved charities directly out of your traditional IRA. This can be a tax-smart opportunity, but it will expire at the end of this year unless Congress acts. Here's what you need to know.  

Qualified Charitable Distribution Basics  

So-called qualified charitable distributions (QCDs) come out of your traditional IRA free of any federal income hit. In contrast, other IRA distributions are taxable. Unlike garden-variety cash donations to charities, you can't claim itemized deductions for QCDs. That's OK, because the tax-free treatment of QCDs equates to a 100% deduction (because you will never be taxed on those amounts) without having to worry about restrictions that apply to itemized charitable write-offs.

If you inherited an IRA from the original account owner, you too can do the QCD drill if you have reached 70-1/2.

A QCD must meet all of the following tax-law requirements.
1. It must be distributed from an IRA, and it cannot occur before you, as the IRA owner or beneficiary, are 70-1/2. 
2. It must be distributed directly by the IRA trustee to an eligible IRS-approved charity.
3. A distribution check issued by the trustee and made payable to an eligible charity meets the preceding requirement even if you handle the check on its way to the charity. However, when a distribution check is made out to you personally, it cannot be a QCD no matter how you handle it.
4. It must meet the normal tax-law requirements for a 100% deductible charitable donation. Beware of this rule: If you receive any benefits that would be subtracted from a donation under the normal charitable deduction rules, such as tickets to an event, the distribution cannot be a QCD.

Read on Smart Money: http://www.smartmoney.com/taxes/estate/making-charitable-donations-from-your-ira-1311099005823/?link=SM_taxes_featStory. This article was originally posted on Smart Money by an author unaffiliated with Capital Investment Advisors. As a part of our effort to disseminate important relevant information to our clients, we frequently post articles from other sites on topics of interest. The information posted in this article does not necessarily reflect the views of our firm.