If in a subsequent year the taxpayer takes a qualifying distribution
, it is excludable from gross income.
If the distribution from a Roth IRA is not a qualifying distribution
(for whatever reason), the distribution is includible in the taxpayer's income to the extent attributable to earnings.
If on November 1, 2008, U obtains a family HDHP, he is eligible to take another qualifying distribution
of up to $2,900--for a total of $6,700 for the year.
A controversial provision of the Act prohibits non-operating private foundations from counting payments to a Type III SO as a qualifying distribution
. They also cannot count payments to other types of SOs which are controlled by disqualified persons of the foundation as qualifying distributions
EXHIBIT 2 TAX-FAVORED EDUCATION SAVINGS VEHICLES Qualified Tuition Program Applicable IRC section 529 Tax benefit Account investment earnings not taxed Maximum contribution Determined by QTP plan provisions; generally equal to amount necessary to provide for QEEs Maximum annual Amount of QEEs qualifying distribution
MAGI phaseout No phaseout Whose expenses?
In our example, the participant could separate from service in 2010, make a direct rollover of his account balance to his new employer's plan, and receive a qualifying distribution
from the new plan in 2013 or later.
(Distributions made by one nonoperating foundation or trust to another were subject to a number of conditions and restrictions requiring a "pass-through" of the distribution, whereby the donor organization received credit for a qualifying distribution
but the donee organization did not.) Additionally, contributions to operating foundations or trusts, along with contributions to most other charitable organizations, were deductible on the donor's individual income tax return up to 50 percent of the "adjusted gross income" (as opposed to 30 percent for contributions to nonoperating foundations).
A qualifying distribution
is one in which the proceeds are used by the individual within 120 days of the distribution date for the acquisition of a principal residence; and the principal residence is acquired by the taxpayer, his or her spouse, or the taxpayer's or taxpayer's spouse's child, grandchild or ancestor.
The foundation's determination of whether a grant is a qualifying distribution
If total Tax Year 2009 qualifying distributions
were larger than the total of averaged qualifying distributions
made between 2004 and 2008 plus 1 percent of Tax Year 2009 net investment income, a foundation was eligible for the reduced tax rate for Tax Year 2009.
4942 to make "qualifying distributions
" at least equal to a minimum distributable amount each tax year.
The status of the economy and the stock market affect assets and giving levels, which in turn affect the charitable administrative expense portion of qualifying distributions
. Independent foundations are particularly sensitive to economic trends because their mandated charitable distribution levels (payout) are based on their net assets.