QCD Question
Does the elimination of 2020 RMD requirement affect the ability to utilize the QCD vehicle?
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In an earlier response an answer was stated ” A QCD would still be non taxable.” Does this mean in 2020 w/o a RMD the QCD would be non taxable as a charitable donation in an ITEMIZED Scheule A 2020 return .?
- No. It means a QCD done with an IRA distribution would be a non taxable distribution from the IRA. It would not change your AGI or taxable income. But it does reduce your IRA balance that would have been taxable by reducing future RMDs slightly. You cannot itemize a QCD reported as such, same as in an RMD year.
- On the other hand, if you have enough itemized deductions to itemize without a donation, you could make a charitable donation with other non IRA funds, and increase your deductions (subject to certain limits). This would not reduce your AGI, but would reduce your taxable income for the current year. But most seniors do not have enough deductions to itemize.
Is an IRA distribution to a church (in our case a United Methodist Church) eligible to be a QCD?
Yes, the church is an eligible charity for a QCD. Of course, you must be 70.5 in order to qualify for a QCD.
Permalink Submitted by David Mertz on Tue, 2020-04-07 19:44
The ability to do a QCD is unaffected. There is no requirement that a QCD be from an RMD.