Are TIRA Account Checks Written By Account Owner Qualified Charitable Distributions?

Submitted by fairira on Sat, 2018-12-01 04:32

Vanguard allows an IRA account owner to write checks on his IRA account. Clearly such checks would be IRA distributions.

If the account owner writes such a check to a 501(c)(3( organization, is this a Qualified Charitable Distribution or to be one, must Vanguard prepare the check?

Thank you.



Submitted by Alan - IRA critic on Sat, 2018-12-01 19:53

  • If properly executed the IRA owner can write a check as a QCD, and more IRA custodians are encouraging this. An owner issued check is considered included in QA 41 of Notice 2007-7 since the question includes no limitation on who writes the check.
  • The risk with this is that if the charity does not cash the check by year end, the IRA custodian will not know about the distribution and the 1099R will often fall short of the RMD amount.  Not sure if the custodians have developed a work around for that. With no specific work around, the IRA owner would have to take extra effort to make sure the charity understands that the check needs to be cashed promptly, and such checks should probably be delivered to the charity before Thanksgiving.

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