Charitable contribution from IRA prior to QCD passage
Obviously there isn’t yet any QCD legislation for 2014, and there may not be until after the election.
In the meantime, if there’s a charitable contribution you were going to make anyway, can you do the following:
– Get a check from the IRA made out to the charity and have it sent to you
– Send the check to the charity
– If QCD legislation is ultimately passed, treat this as a QCD, if not treat it as a regular charitable contribution (with the amount being a part of an RMD)
I believe that past QCD extenders did include provisions for including contributions earlier in that calendar year, but only if there was a check direct from the IRA to the charity.
FWIW – When I made QCD contributions last year my IRA administrator (Charles Schwab) did send me the checks to forward to the relevant charities rather than sending them direct to the charities themselves. I’m pretty sure this was permissible, but of course there was QCD legislation in place for 2013.
Any insights? Thanks!
Permalink Submitted by Alan - IRA critic on Sat, 2014-05-10 16:49
You have this right. In recent years the retroactive QCD extender was retroactive to Jan 1, so if this happens again, a direct distribution to the charity from your IRA will qualify as a QCD. If not extended, then the distribution is not reported as a QCD, but you can deduct the charitable contribution if you itemize. For some custodians, it might be a challenge to get them to make out the check to the charity before the QCD has been extended, but this is a requirement to claim a QCD in any case. Finally,do not take any distributions before the check to the charity because the first distribution is applied against your RMD, eliminating the chance to have the QCD applied to that portion of your RMD.
Permalink Submitted by Andrew Glassberg on Sat, 2014-05-10 19:02
Thank you.Does anyone have experience doing this in 2014? Looking at the Charles Schwab hard copy IRA distribution form it certainly looks like you can request a distribution check made out to a third party, but sent to you. That’s what I did last year, but of course there was QCD legislation in place. Any reason to anticipate that Charles Schwab wouldn’t honor the rquest to have the distribution made out to a third party?
Permalink Submitted by tomd37 on Sat, 2014-10-11 18:01
Vanguard has just sent my 2014 QCD checks made payable to my qualified charities to my home. Vanguard will take the QCD request on the telephone if the individual QCD is $5000 or less. I will send them out to the charities under a cover letter this coming week. If QCDs are subsequently approved by Congress for 2014 tax year I will reflect them accordingly on my 1040 tax return. If not approved for 2014 I might use them as part of my itemized deductions if I can come up with enough deductions to exceed the standard deduction for a MFJ couple over 65. It’s difficult for us to reach that level since there is no mortgage interest to be reported. Will take the remaining RMD between now and December 15th. Tom D.