charitable distribution from an IRA
I am not sure if this question can be answered here or not, but given many of the brilliant people on these pages, I am hoping. If a person writes a check out of an IRA to a charitable organization, I know that counts against the RMD requirements. It is also a non-taxable event to the donor / IRA-holder. My question is, does the IRS look at when the check was written or when it was cashed as the date of the distribution?
Thanks in advance for any help on this!
Permalink Submitted by Alan - IRA critic on Thu, 2022-11-17 22:50
In practice, after it is reflected for 1099R reporting. The IRS has approved IRA owner checks as valid QCDs, treating them as if passing directly from the IRA custodian to the charity. That said, because the IRA custodian is not aware of such checks having been written until they are returned by the bank after the charity cashes them, if the charity fails to negotiate the check in time for it to be returned to the custodian before year end, the 1099R will not reflect the QCD distribution, and the IRA owner may fall short of their RMD in the eyes of the IRS, requiring a 5329 penalty waiver request. Various tax reporting issues are possible depending on the total of other distributions. Due to variety of issues a delinquent charity can cause, it is recommended that owner written checks be provided to the charities by the end of October and the IRA owner should verify that the custodian has recorded the distribution about a month after the charity has received the check, so that action can be taken before year end.