Qualified Charitable Distributions
I have a client who has already received $2,000 (and I’m using round numbers here) from his $10,000 2019 RMD. He now wants $5,000 sent to his church, and the $3,000 balance of his 2019 RMD sent to him. My understanding is that the $5,000 will not be taxed as income. However, can he have an additional amount, say another $5,000, sent to his church as a QCD? What would be taxable and what would not be taxable in a situation like this? I have read your newsletter, Pub 590, and other material and it’s still not clear to me, so I would really appreciate your help with this.
nofrills
Permalink Submitted by Alan - IRA critic on Fri, 2019-05-03 17:10
A QCD is not taxable or included in AGI regardless of whether it is also applied to the RMD. In this case, client would report a distribution of 15000 with 10000 being a QCD.That leaves 5000 which is taxable, and the RMD was satisfied by the first 10000 of distributions. Note that if client had done 10000 of QCDs as the first distributions, the taxable amount would still be 5000.