QCD CHECK BY IRA OWNER, 2022 CHARITY RECEIPT VS 2023 1099R

Submitted by Dana Evans on Fri, 2023-09-29 15:42

Hello!
I have a situation where the IRA owner wrote a QCD check to charity in December 2022 (I know this is a horrible practice and have advised against this).
Charity gave IRA owner a proper receipt for the 2022 donation. However, the check did not clear the IRA account until January 2023.
The 2022 Form 1099-R does NOT include this donation.
How should I handle this on the 2022 and 2023 returns?

Thank you in advance for your advice!!!! Dana



Submitted by Alan - IRA critic on Fri, 2023-09-29 18:51

Was the receipt dated in 2022? Did the omission of the QCD check from the 1099R result in an RMD shortfall for 2022?

Submitted by Dana Evans on Mon, 2023-10-02 19:08

Hello! Yes the charity receipt is for 2022 since they did receive the check in 2022. The IRA check written by the owner did not clear the IRA account until 2023 so therefore it was not on the 1099R and it did create a RMD shortfall.The amount of the check was $350 and the RMD shortfall is $335.80 for 2022.I know I need to show the shortfall on the Form 5329 and can ask for the waiver, and have requested an additional $335.80 to be added to the 2023 RMD. I know this is a very small amount…just wondering what is the proper way to handle the charitable contribution / QCD if any.

Submitted by Alan - IRA critic on Mon, 2023-10-02 23:57

  • Since the 2022 1099R reported distributions fall short of the RMD, the shortfall will have to be made up this year and that can be done by taking the expected 2023 RMD and letting the clearance of the delayed cashing of the QCD check make up the delinquent 2022 RMD amount. But the QCD must be claimed on the 2022 return because the donation and acknowledgement was actually completed in 2022. Another QCD could of course be made for 2023 to offset the higher taxable income from the added distribution in 2023. 
  • Based on all this the IRA owner will probably adopt a much earlier deadline for future check written QCDs, and also monitor the IRA activity statement to make sure the QCD checks are cashed well before December.

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