IRA RMD not taxed if sent to charity?
Hi,
I have read that if one directs the RMD directly to a charitable organization, then it’s not taxable, and it’s not going to affect the new standard deduction. This is good news for those running charitable organizations, as the older incentive now is gone. Can you clarify that this is indeed true? Thank you
Permalink Submitted by tomd37 on Tue, 2018-10-02 14:15
It is called a Qualified Charitable Distribution (QCD) and is available as a distribution from a traditional IRA (not a 401k). It is only available after the owner has reached the age of 70.5 (not a day before). The total IRA distribution will be reported on your 1099-R form and it is up to the taxpayer to report it properly on lines 15a and 15b on form 1040 as to the taxable amount with the proper notation QCD in front of line 15b. It really does not have anything to do with the new standard deduction amount. The real impact is that for those persons no longer itemizing their deductions it actually reduces their AGI and thereby reduces the taxable income. Usually a reduction to taxable income is a much better situtation. Tom D.