The QCD/RMD Trap Door: Act Now Before It’s Too Late!
A qualified charitable distribution (QCD) counts toward the donor’s required minimum distribution (RMD), and that’s a great way to avoid some of the income tax on the RMD. However, some donors miss the fact that RMDs apply to all qualified retirement plans. In addition, donors may not fully understand that withdrawals from any qualified plan are taxable income unless the withdrawal is a QCD or a tax-free rollover to a different qualified plan.
So, while it’s accurate to say “your QCD will reduce the tax on your RMD,” that’s true only for the IRA account from which the QCD is made. And that’s the trap that snared your hapless donor: there is an RMD on their 401(k) which they will have to take this year. But they cannot make a QCD from a 401(k) to offset that RMD. Even worse, their retirement plan custodian cannot make a tax-free rollover to an IRA until after this year’s RMD has been withdrawn from the 401(k). Alas, it’s too late for this year but, fortunately, it’s easy to avoid this trap next year … if they act now.
Quick Tip: Ringing in 2026 with GiftWrap Year End Update
From the Blog: Gifts of Silver and Gold
When Expats Make Gifts
ACGA Announces Rates Will Remain the Same
PGM Anywhere Updated with New QCD Maximums and More!
Client Services Holiday Hours
Temple University Partners with Foundation Source to Create Its Own Branded DAF
PG Calc Webinar
Taxation Basics for Fundraisers
Whether you are a gift planning specialist or a fundraising generalist, there are some essentials you should know about Federal taxes. In this webinar, Craig Wruck will cover the basics of the income tax and transfer taxes (gift taxes, estate taxes, generation skipping transfer taxes). Craig’s focus will be on a conceptual understanding that will equip you to provide clear and concise explanations to your donors. In addition to the basics of taxation, Craig will describe the tax benefits associated with charitable gifts and factors that can affect these benefits. His discussion will be based on current tax law.
How will you stay on top of planned giving trends and developments in 2026? How will you train your staff and colleagues on the art and techniques of gift planning? Each month in 2026, PG Calc’s webinar series will bring you the latest thinking on a wide range of gift planning topics from PG Calc experts and thought leaders such as Russell James, Andrew Fussner, Ericka Webb, and Alasdair Halliday.
Quick Tip: Ringing in 2026 with GiftWrap Year End Update
In late December 2025, or early January 2026, GiftWrap users must run Year End Update, rolling the database forward to 2026. Until Year End Update is performed, no new gifts or deaths can be processed in GiftWrap in the new year. In addition, 1099-Rs for 2025 cannot be issued.
This essential function happens at the Organization level, and must be performed for each separate organization within your instance of GiftWrap. For instance, if you are a bank using GiftWrap to assist multiple charities, or a charity containing multitudes (such as a University with a college, medical school, and law school) you will need to perform the update for each organization within your single instance of GiftWrap.
On the toolbar, select Actions.
Scroll down and select Year End Update.
After selecting your Organization by name, enter 2026 in the Update to Year field.
Click Update.
Running Year End Update also creates 2026 payment rows for active beneficiaries (Donor/Bene-A or Bene-A) for both existing gifts and new gifts added in 2026.
After updating to 2026, you may continue to enter 2025 gifts as necessary. Note that if payments dated in year 2025 are needed for a gift added to GiftWrap after running Year End Update, you will need to enter the 2025 payment rows manually.
Contact Client Services at support@pgcalc.com or at 888-474-2252 if you have any questions or need help.
From the Blog: Gifts of Silver and Gold
Historically, most charitable gift annuities (CGAs) have been funded by cash donations. In some cases, however, donors prefer to use appreciated securities to establish their CGAs. But what happens when the donor wishes to establish a gift annuity using holdings of silver or gold? Are the benefits similar to using appreciated securities to fund CGAs? Turns out there are some similarities, but there are also significant differences.
United States citizens living overseas (U.S. expats) can donate assets to establish charitable gift annuities with U.S. charities or charitable remainder trusts. But what are the specifics? Can U.S. expats fund charitable gift annuities or charitable remainder trusts? Can they donate foreign assets? Can they receive a charitable deduction?
On November 17th, the American Council on Gift Annuities (ACGA) confirmed in an email to its membership that it will be maintaining its current suggested maximum annuity rates for charitable gift annuities (CGAs). The ACGA continuously monitors market performance and is prepared to adjust its suggested maximum rates whenever appropriate. You will find links to the ACGA’s current suggested maximum rates and the assumptions underlying them here. The current ACGA rates went into effect on January 1, 2024.
PGM Anywhere Updated with New QCD Maximums and More!
On December 4, we released the latest update of PGM Anywhere, our online gift planning software. This update focuses on tax changes that will go into effect in the new year. Enhancements include:
Application of the 35% limit on federal income tax savings when a gift is in 2026 or later and the donor’s federal income tax rate is 37%.
Application of the 2026 QCD limit for funding gift annuities ($55,000) and the 2026 trust tax schedule when the gift is in 2026 or later.
2026 values in Help for tax items, such as income tax schedules and gift/estate tax exemptions, that are adjusted annually for inflation. This information is also available in PG Calc’s online Knowledge Base.
For full details on these and other improvements and bug fixes, click the “Release Notes” link on the PGM Anywhere login screen.
Client Services Holiday Hours – PG Calc Elves Are Standing By
While we wish donors wouldn’t procrastinate, a fair number always wait until the waning days of the year to make their gifts. To assist you with any last minute questions, Client Services will be open from 8:30 a.m. to 6 p.m. ET on the following Days: December 23, December 24 (until noon), December 26, December 29, December 30 and December 31 (until noon).
We look forward to assisting you! You can reach us at support@pgcalc.com or 888-474-2252.
Temple University Partners with Foundation Source to Create Its Own Branded DAF
Temple University recently partnered with DAF sponsor Charityvest, which is powered by Foundation Source’s turnkey DAF technology, to create its own fully branded DAF. This helps Temple tap into the popularity and flexibility of DAFs and offers alumni and supporters new options to support the University and their broader charitable goals.
If you would like to better understand how fully branded DAFs work and their advantages, schedule a conversation with Austen Freeborn.
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