RMD and QCD Question

Submitted by Mike Caldwell on Mon, 2020-06-29 13:13

This question may have already been addressed and if so apologize for not seeing it. I took a RMD in January that I immediately wrote checks on for QCDs. Since RMDs are now not required this year will I report that RMD as income offset by the QCDs that I wrote checks for. If I return the RMD to my IRA what are the ramifications?

Mike



Submitted by Alan - IRA critic on Mon, 2020-06-29 14:57

  • If you return the distribution via rollover by 8/31, you will report a rollover on Form 1040 and NOT  a QCD. If able to itemize your deductions you can then itemize the donation and your taxable income will be reduced for 2020. If you do not return the funds to your IRA, you will have a QCD which will not reduce your 2020 taxable income, but will reduce your IRA balance and therefore reduce future RMDs.  If you cannot itemize the donation in an amount that exceeds your standard deduction by the amount of the donation, you are better off just keeping the QCD as is.
  • Regarding HOW you made the January QCD,  you may not have done a QCD to begin with. If you received a check from the IRA custodian made out to you, deposited it, then wrote your own check to the charity, that does not qualify as a QCD. But if you have checkwriting authority on your IRA and wrote a direct check on the IRA account to the charity, that qualifies as a QCD. Not sure how you did this.

Submitted by Mike Caldwell on Wed, 2020-07-01 14:42

I have checkwriting authority on my IRA so I wrote a direct check on the IRA account.

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