Question On Qualified Charitable Distributions
This question is concerning ‘Qualified Charitable Distributions’ (QCD’s). Broker-dealer no longer is allowing any third party cash transfers whatsoever and have also included this for QCD’s. Being that the reporting code that reflects on the clients 1099-R is exactly the same, if a client wishes to a QCD, are they able to simply take a ‘Normal Distributon’ (same reporting code) and then once they receive the monies, write a check themselves directly to the charitable organization involved ?
Permalink Submitted by Alan - IRA critic on Mon, 2025-01-06 11:45
No, that is clearly not allowable under the IRS definition of a QCD and could not be reported as a QCD.
That said, if the custodian offers check writing for IRA accounts, the client could request a checkbook and write their own QCD checks, which is allowed because the check is written on the IRA itself and the distribution taken directly from the IRA. If client does this, the QCDs should be done earlier in the year because the 1099R will not reflect the distribution until the charity cashes the check and it is returned to custodian’s bank. If that occurred after year end the client would fall short of their RMD.