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Q: I am confused by the advantages, if any, of using qualified charitable distributions (QCDs) to contribute to charity after I reach 70½, as I am not required yet to take minimum distributions from my IRA. I have read different conclusions. Some sources indicate that there are no tax advantages. In your columns, you have indicated that there are tax advantages. Which is correct?

A: There are definite tax advantages. Slott points out that when you make a contribution to a qualified charity by way of a QCD, you are allowed to reduce your modified adjusted income by the amount of your QCD contribution, so you are, in effect, reducing your taxes by the amount of your QCD multiplied by your marginal tax bracket. The IRS concurs with this.

Q: In a recent column, you suggested that readers contact their congressional representatives to pass legislation that will provide more income to Social Security so that benefits will not have to be cut in the future. Isn’t it true that the recent legislation did not impact Social Security regulations?

A: That is correct. However, the legislation that was passed at the end of 2024 to repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) increased benefits for Social Security recipients by hundreds of millions of dollars per year.

Although the new legislation passed in 2025 did not provide additional benefits to Social Security participants, the legislation did not provide any new sources of income to the government regarding Social Security.

Without significant changes to Social Security regulations in the next few years, it is highly likely that Social Security benefits will have to be reduced in the future.

Q: I plan on purchasing gold coins for investment and possibly to provide as gifts to some relatives. What are the tax considerations if there are increases in value?

A: An excellent source for this issue is “Your Guide to Paying Taxes on Precious Metals” by Hero Bullion (herobullion.com; (214) 210-9948).

If you hold the coins for longer than one year before you redeem them, then you can report the gains as long-term capital gains on your tax return.

If you only hold the coins for less than a year, then you have to report the gains and pay tax based on your marginal tax rate. You are allowed to deduct any expenses such as sales tax or storage expenses on your return.

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.

© 2025 Elliot Raphaelson. Distributed by Tribune Content Agency, LLC.