QCD’s ( Qualified Charitable Distributions)

Submitted by Gregg Guiol on Thu, 2015-12-24 14:16

I have a client who is 75 years of age and has met his RMD for this 2015 calendar year …
This client with the recent passing of a bill in Congress, has decided to do some QCD’s to a few different charitable organizations … My question is, his ‘Normal’ RMD distributions will generate a 1099-R with a distribution code of ‘7’ (seven) which is fine. For the QCD’s made, is there a separate distribution code utilized for this type of distribution ? If not, how does the client proceed when filing next year, being that he will have his RMD monies and charitable monies reflected all as one on the 1099-R ?

As always, thanks for your input … Your forum is awesome and has always been very helpful.

Thank you –

Gregg Guiol



Submitted by David Mertz on Thu, 2015-12-24 16:10

QCDs are not reported by the payer any differently than a normal distribution, so it would be expected that the RMD distribution and the QCD from a single payer would be combined on a single 1099-R.  When reporting this, Form 1040 line 15a (or Form 1040A line 11a) should show the total gross distribution but line 15b (or 11b) should exclude the amount that was a QCD.  This line should also have the letters “QCD” next to it to indicate that the taxable amount is less than the total distribution because a portion was QCD.

Submitted by Alan - IRA critic on Thu, 2015-12-24 16:22

  • Client should have waited on the QCD, or had his first distributions processed as a QCD so that the QCD could be applied to reduce taxation of the RMD. However, since the QCD has now been made permanent, taxpayers will not have to wait deep into December for QCD extension any longer. Further, since the QCD is now permanent it would make sense for the IRS to assign a unique distribution code to identify a QCD and probably reduce tax leakage in the process. On the other hand, the financial industry could resist the responsibility of properly identifying eligible donee organizations and this gets complex when private foundations are involved. A unique QCD code would also add another 1099R as the QCD would require a different 1099R than other distributions in excess of the QCD.
  • If client has any basis in his IRA, 1040 and 8606 preparation can get tricky because the QCD cannot include basis and is not reported on the 8606, while non QCD distributions require an 8606 in the usual manner.

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