RMD charitable distributions
Client is over 72, wants to make his 2013 ( $4,000.00) RMD distribution to a qualified
501(c)(3)charity. May the IRA distribution go straight to the charity and still count as his 2013 RMD and still be excluded from his income on a federal level? I realize that this step does not qualify as a charitable income tax deduction.
Thanks for your feedback
John Ostner
Permalink Submitted by Alan - IRA critic on Mon, 2013-10-28 23:34
Yes. The QCD can be more or less than the RMD amount. If the client wants his full RMD to be a QCD, he cannot take any distribution prior to the QCD check for 2013. IRA custodians generally issue the check made out to the charity and mail it to the client for delivery to the charity. Client would then report a 4,000 distribution on line 15a of Form 1040 with nothing in 15b and “QCD” entered on the line next to 15b. This will keep the RMD out of client’s AGI and can reduce taxation of SS benefits in some cases. Most states conform to the QCD on the state return as well, but check with client’s state booklet to be sure.