IRA to charity

Submitted by Jeffrey Evans on Mon, 2019-08-05 13:31

what are the steps to be followed for an IRA to charity transfer and what should be noted on the tax form to indicate that a transfer was made?

Permalink Submitted by Alan - IRA critic on Mon, 2019-08-05 15:18

First, be sure you are 70.5 to the day, as you cannot do a QCD before that date. The check must be made out directly to the charity whether you have IRA check writing or in the more common situation, you contact your IRA custodian and supply them the name of the charity and the custodian makes out the check to the charity and mails it to you for delivery. There is no limit to the number of checks or charities, but the total QCDs for a calendar year cannot exceed 100k. You must also secure the same acknowledgement from each charity that you would have to if you made an ordinary non QCD donation.
There is no special 1099R reporting for a QCD, therefore you must report your taxable amount on line 4 of Form 1040 with “QCD” entered next to the line. The QCD will not be included in the taxable amount. Because the first dollars distributed in a year automatically are applied to your RMD, you must be sure to do your QCDs in the right order. To be safe, it is best to do the QCDs first if you are not sure whether non QCD distributions will prevent your QCD from applying to your RMD.