QCDs and 60 day rollover
Is a QCD eligibile for the 60 day rollover if outside funds are used? For example, a $10,000 QCD is made within 60 days to satisfy the RMD requirement. Now that there is no RMD requirement for 2020, can the individual put $10,000 of their own funds back into the IRA?
Permalink Submitted by David Mertz on Mon, 2020-04-13 15:55
Yes, the amount can be rolled over subject to the rollover deadline and the once-per-12-months rollover limitation, but if rolled over it will no longer qualify as a QCD. The charitable contribution will instead need to claimed on Schedule A [or as an above-the-line deduction of up to $300; see Alan-iracritic’s reply below].
Permalink Submitted by Alan - IRA critic on Mon, 2020-04-13 16:54
Yes, but then they would report a rollover and not a QCD. By not reporting a QCD, they could itemize the donation if they were able to itemize. In 2020 they could take the $300 above the line deduction if they don’t itemize. Essentially, it would be the same as if they made a donation with after tax money like they might do before they were 70.5. Finally, they must have a rollover available to do (one per 12 month period), and by doing it to replace a QCD, they are making the turning 10,000 of after tax money into pre tax money.
Permalink Submitted by Greg Bennett on Wed, 2020-04-15 00:27
Hello, If a client completed a 60 day rollover on July 25 2019 (withdrawal in late May 2019 with no withholds and a return of funds into same account within 60 days), would same client need to wait until 365 days after the July 25, 2019 date to take a CARES act “loan” from the same IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2020-04-15 01:14
CARES is not applicable to this unless the client actually qualifies for a corona virus related distribution. If they do qualify there is no waiting time to take the distribution. If they do not qualify, the usual one rollover per 12 months limit applies, and the 12 month wait started on the date the May, 2019 distribution was received.