RMD to Charity for 2012
A client of our group directed a portion of their RMD to a charity for 2012.
I advised them that the qualified charitable rollover has not been extended to 2012.
Does anyone know what the implications are for this action? Will the portions distributed from the IRA NOT count against their RMD amounts for 2012? Or, will it be treated as an IRA withdrawal that was merely sent to a third party, only to be counted as a charitable contribution rather than a QCR?
Thank you.
Permalink Submitted by Alan Spross on Wed, 2012-03-14 19:57
It would be reported as an IRA distribution to the client on line 15 of Form 1040 and would be credited against any RMD not taken previously. Client could then itemize the charitable contribution on Sch A, all in the same fashion as the pre QCD days. The 1099R will be the same, since there is no special reporting for a QCD from the IRA custodian.
If Congress extends the QCD, they typically do it retroactively to January, so the client would still be able to report this as a QCD if extended, and it would be excluded from his AGI and his RMD would be credited up to the amount of the QCD. Therefore, the client will probably have to wait until December to know about the fate of the QCD.
Permalink Submitted by mk foss on Wed, 2012-03-14 21:08
I agree with Alan but the important thing is there is no downside here. The charity gets the money, he gets the deduction it just depends on whether its on the front page or Schedule A.
I had a client who did a QCD in early 2010 prior to converting 100% of his IRA to Roth. The law passed December 17, 2010 was retroactive and everything worked well.
Permalink Submitted by Christopher Lamb on Thu, 2012-03-15 01:53
[quote=”[email protected]“]I agree with Alan but the important thing is there is no downside here. The charity gets the money, he gets the deduction it just depends on whether its on the front page or Schedule A.
I had a client who did a QCD in early 2010 prior to converting 100% of his IRA to Roth. The law passed December 17, 2010 was retroactive and everything worked well.[/quote]
Excellent. Thanks to you both. That was our thinking as well, but I just wanted to make sure we weren’t missing something.
Chris