Charity Navigator & QCDs

[delamer]

We’ve been using Charity Navigator (CN) to make our donations, because we like the anonymity.

I’m interested in any experiences that posters here have had with using it to make QCDs.

We haven’t done any QCDs in any form yet, so I’m unfamiliar with the process.

So I’m curious as to whether going through CN is significantly more cumbersome than sending a QCD directly to a charity. CN mentions QCDs on their website, but I didn’t see any “how to” details.

[Bogle7]

I make all our QCDs directly from my tIRA at Fidelity. Ask your custodian how to donate anonymously.
I only use Charity Navigator to check out the charity's score.
Keep good records as QCDs only show up as the difference between line 4a and 4b on your 1040. My tax guy adds "QCD" in the empty space between between lines 3b and 4b.

I find that only half of the charities send an acknowledgement. I rely on my Fidelity report which lists the QCDs.

[jebmke]

I make all our QCDs directly from my tIRA at Fidelity. Ask your custodian how to donate anonymously.
I only use Charity Navigator to check out the charity's score.
Keep good records as QCDs only show up as the difference between line 4a and 4b on your 1040. My tax guy adds "QCD" in the empty space between between lines 3b and 4b.

Not sure you can do QCDs anonymously. I am pretty sureyou need to get an acknowledgement from the recipient the same as you would with a Schedule A donation. You may need this to satisfy an inquiry from the IRS.

[sport]

From IRS Pub 1771:
„ Donors must have a bank record or written communication from a charity for any
monetary contribution before the donors can claim a charitable contribution on their federal
income tax returns.
„ Donors are responsible for obtaining a written acknowledgment from a charity for any
single contribution of $250 or more before the donors can claim a charitable contribution on
their federal income tax returns.
„ Charitable organizations are required to provide a written disclosure to a donor who
receives goods or services in exchange for a single payment in excess of $75.

[Faith20879]

Not sure you can do QCDs anonymously. I am pretty sureyou need to get an acknowledgement from the recipient the same as you would with a Schedule A donation. You may need this to satisfy an inquiry from the IRS.

I think this is the key point. I glanced pub 1771 but didn't see a mention of QCD, I think it is for reporting regular charity giving. Disclaimer: I have not started qcd but am very keen to learn.

[jebmke]

Not sure you can do QCDs anonymously. I am pretty sureyou need to get an acknowledgement from the recipient the same as you would with a Schedule A donation. You may need this to satisfy an inquiry from the IRS.

I think this is the key point. I glanced pub 1771 but didn't see a mention of QCD, I think it is for reporting regular charity giving. Disclaimer: I have not started qcd but am very keen to learn.

QCD Guidelines
Taxpayers who make a QCD must be at least 70½ years old on the day of the distribution.
A QCD will count toward a required minimum distribution.
The taxpayer must have an acknowledgement of the contribution.
The amount of the QCD can't be more than the amount of the distribution that would count as income.
Declare the QCD as income to claim the charitable contribution as a deduction.
The maximum annual exclusion for QCDs is $100,000.
When filing a joint return, the spouse can also have a QCD and exclude up to $100,000.
Any QCD more than the $100,000 exclusion limit counts as income like any other distribution.
The amount of QCD contribution limits for exclusion reduce after age 70½.

I have helped taxpayers respond to CP letters where documentation was required to support the reduction of the taxable amount.

[sport]

Not sure you can do QCDs anonymously. I am pretty sureyou need to get an acknowledgement from the recipient the same as you would with a Schedule A donation. You may need this to satisfy an inquiry from the IRS.

I think this is the key point. I glanced pub 1771 but didn't see a mention of QCD, I think it is for reporting regular charity giving. Disclaimer: I have not started qcd but am very keen to learn.

Pub 590B refers to Pub 526 which refers to Pub 1771.

[tomd37]

I do not understand the statement "The amount of QCD contribution limits for exclusion reduce after age 70 1/2." Please explain to this old mind.

[jebmke]

I do not understand the statement "The amount of QCD contribution limits for exclusion reduce after age 70 1/2." Please explain to this old mind.

If you make a contribution to an IRA after age 70.5, it reduces what can be excluded later until the contribution is clawed back.

[Agent 99]

The issue of anonymity was discussed in this thread:

viewtopic.php?t=304994

The final answer: QCDs cannot be made anonymously.

[jebmke]

The issue of anonymity was discussed in this thread:

viewtopic.php?t=304994

The final answer: QCDs cannot be made anonymously.

I'm not making them yet but the best I've come up with for me is to make a QCD to our local community foundation. They support local charities which are a large part of where our current DAF donations go. Once the funds go to the foundation, it is their choice where to distribute funds of course.

[GerryL]

I have contacted charities directly to tell them I will make a contribution but do not want my name/address to be entered into their database. You can state implicitly or explicitly that if you receive any mailings -- beyond the acknowledgement letter -- from the charity, they will no longer get donations from you.

Be warned, however, that agreement can break down if personnel change and may have to be reiterated. (My experience.)

[Agent 99]

The issue of anonymity was discussed in this thread:

viewtopic.php?t=304994

The final answer: QCDs cannot be made anonymously.

I'm not making them yet but the best I've come up with for me is to make a QCD to our local community foundation. They support local charities which are a large part of where our current DAF donations go. Once the funds go to the foundation, it is their choice where to distribute funds of course.

According to the Kitces link in the thread referenced private foundations are not eligible. I assume the local community foundation is public. Seems that the rules for QCDs are quite stringent.

I also prefer to be anonymous. Probably will do what GerryL suggested when the time comes.

[prd1982]

I have contacted charities directly to tell them I will make a contribution but do not want my name/address to be entered into their database. You can state implicitly or explicitly that if you receive any mailings -- beyond the acknowledgement letter -- from the charity, they will no longer get donations from you.

Be warned, however, that agreement can break down if personnel change and may have to be reiterated. (My experience.)

Doesn’t that seem harsh to the charity because of a minor error by a volunteer.

[sport]

I have contacted charities directly to tell them I will make a contribution but do not want my name/address to be entered into their database. You can state implicitly or explicitly that if you receive any mailings -- beyond the acknowledgement letter -- from the charity, they will no longer get donations from you.

Be warned, however, that agreement can break down if personnel change and may have to be reiterated. (My experience.)

Doesn’t that seem harsh to the charity because of a minor error by a volunteer.

As an alternative, you can just ask the charity not to solicit donations from you more often than once a year. There is one charity that I donate to at the beginning of the year. When they started sending numerous solicitations, I wrote to the CEO and asked them to stop doing that. I told them to spend the money on their goals instead. They did what I asked.

[delamer]

I have contacted charities directly to tell them I will make a contribution but do not want my name/address to be entered into their database. You can state implicitly or explicitly that if you receive any mailings -- beyond the acknowledgement letter -- from the charity, they will no longer get donations from you.

Be warned, however, that agreement can break down if personnel change and may have to be reiterated. (My experience.)

I have no doubt having to reiterate anonymity requests would be an issue. But if the charity doesn’t know who I am to begin with, problem solved.

There is a charity that I have donated to directly, and I get e-mails a few times a week from them soliciting more funds. Since I’m a believer in their mission, it’s just an annoyance.

But if there were 4 or 5 charities sending me e-mails that regularly, I’d be unhappy. So that’s why I’ve been going through Charity Navigator for other causes.

[celia]

We’ve been using Charity Navigator (CN) to make our donations, because we like the anonymity.

I’m interested in any experiences that posters here have had with using it to make QCDs.

Sure, you can send them a QCD check, but they will know who you are and your address. Since they are a charity, they will acknowledge the donation and probably let you know it will be used for their data collection and maintenance of their website.

We haven’t done any QCDs in any form yet, so I’m unfamiliar with the process.

Ask the custodian to send you a check from your IRA made out to the charity. It will be mailed to you. Write on the attached “receipt” to not add you to any mailing lists (preferably using red ink). (All our recipients honored this.). Make a copy. Mail or hand deliver the check.

After the acknowledgement arrives, attach it to the copy of the check and file them away and save it with the copy of your tax return the following year.

So I’m curious as to whether going through CN is significantly more cumbersome than sending a QCD directly to a charity. CN mentions QCDs on their website, but I didn’t see any “how to” details.

They accept checks like other charities do. Their pass-through donation that goes into the shopping cart is only for donations made from Taxable accounts (not IRAs) and there are fees added! It doesn’t accept checks for pass-through donations.

[delamer]

We’ve been using Charity Navigator (CN) to make our donations, because we like the anonymity.

I’m interested in any experiences that posters here have had with using it to make QCDs.

Sure, you can send them a QCD check, but they will know who you are and your address. Since they are a charity, they will acknowledge the donation and probably let you know it will be used for their data collection and maintenance of their website.

We haven’t done any QCDs in any form yet, so I’m unfamiliar with the process.

Ask the custodian to send you a check from your IRA made out to the charity. It will be mailed to you. Write on the attached “receipt” to not add you to any mailing lists (preferably using red ink). (All our recipients honored this.). Make a copy. Mail or hand deliver the check.

After the acknowledgement arrives, attach it to the copy of the check and file them away and save it with the copy of your tax return the following year.

So I’m curious as to whether going through CN is significantly more cumbersome than sending a QCD directly to a charity. CN mentions QCDs on their website, but I didn’t see any “how to” details.

They accept checks like other charities do. Their pass-through donation that goes into the shopping cart is only for donations made from Taxable accounts (not IRAs) and there are fees added! It doesn’t accept checks for pass-through donations.

So you can’t donate QCDs to third-party charities using Charity Navigator?

That’s my bottom-line question.

[Fremdon Ferndock]

As a novice making QCDs, I made a few via an IRA at TIAA-CREF. They send the check directly to the charity. I was able to determine that TIAA did not provide any address information to the charity, which resulted in my not receiving any evidence of my contribution in the form of acknowledgement from the charity. I'm concerned that I might need that documentation if the IRS comes calling. I've subsequently opened an IRA at Vanguard for the purpose of QCDs. My understanding is that they will send the checks to me and then I can forward them to the charities, along with my letter identifying the fact the check is a QCD and asking for acknowledgement. Do I have a problem with the TIAA QCDs? If so, why does TIAA do it this way?

[celia]

So you can’t donate QCDs to third-party charities using Charity Navigator?

That’s my bottom-line question.

No. They aren’t in the business of forwarding mail. They are in the business of rating charities. (I wasn’t even aware they could collect and forward Taxable money.)

There’s too much risk in forwarding your QCD on your behalf. When something goes wrong you would blame them and they’re not even charging you for it. Why should they do that for you and assume the risk of potential problems? (I would say the same for Donations from Taxable accounts.) I assume they are taking on the role of generating an acknowledgement letter for you at the end, especially if you give to several charities at the same time. This is very different than forwarding the other charity’s acknowledgement letter back to you.

You will want your QCD processed as a QCD rather than a regular donation that you previously paid tax on. If you want a tax donation instead, give money from Taxable. (You can’t get a tax donation on QCDs since QCDs are already tax-free.)

[jebmke]

As a novice making QCDs, I made a few via an IRA at TIAA-CREF. They send the check directly to the charity. I was able to determine that TIAA did not provide any address information to the charity, which resulted in my not receiving any evidence of my contribution in the form of acknowledgement from the charity. I'm concerned that I might need that documentation if the IRS comes calling. I've subsequently opened an IRA at Vanguard for the purpose of QCDs. My understanding is that they will send the checks to me and then I can forward them to the charities, along with my letter identifying the fact the check is a QCD and asking for acknowledgement. Do I have a problem with the TIAA QCDs? If so, why does TIAA do it this way?

If you receive a CP letter you may have a problem inasmuch as you have no supporting documentation as required by the IRS. Do you have any evidence that the payments were made to the qualified charity, lack of acknowledgement notwithstanding?

[sport]

along with my letter identifying the fact the check is a QCD and asking for acknowledgement.

You don't have to tell the charity it is a QCD. For the charity, it is just a donation. They have to provide a letter of acknowledgement either way. The donation gets identified as a QCD on your tax return when you file your taxes.

[Fremdon Ferndock]

As a novice making QCDs, I made a few via an IRA at TIAA-CREF. They send the check directly to the charity. I was able to determine that TIAA did not provide any address information to the charity, which resulted in my not receiving any evidence of my contribution in the form of acknowledgement from the charity. I'm concerned that I might need that documentation if the IRS comes calling. I've subsequently opened an IRA at Vanguard for the purpose of QCDs. My understanding is that they will send the checks to me and then I can forward them to the charities, along with my letter identifying the fact the check is a QCD and asking for acknowledgement. Do I have a problem with the TIAA QCDs? If so, why does TIAA do it this way?

If you receive a CP letter you may have a problem inasmuch as you have no supporting documentation as required by the IRS. Do you have any evidence that the payments were made to the qualified charity, lack of acknowledgement notwithstanding?

I have the statements from TIAA that specify the charity and amount for each QCD I made in 2022. Is this the required documentation? However, I have no acknowledgements from the charities due to the issue I described: no info provided by TIAA regarding my address was provided with the checks.

[WoodSpinner]

As a novice making QCDs, I made a few via an IRA at TIAA-CREF. They send the check directly to the charity. I was able to determine that TIAA did not provide any address information to the charity, which resulted in my not receiving any evidence of my contribution in the form of acknowledgement from the charity. I'm concerned that I might need that documentation if the IRS comes calling. I've subsequently opened an IRA at Vanguard for the purpose of QCDs. My understanding is that they will send the checks to me and then I can forward them to the charities, along with my letter identifying the fact the check is a QCD and asking for acknowledgement. Do I have a problem with the TIAA QCDs? If so, why does TIAA do it this way?

If you receive a CP letter you may have a problem inasmuch as you have no supporting documentation as required by the IRS. Do you have any evidence that the payments were made to the qualified charity, lack of acknowledgement notwithstanding?

I have the statements from TIAA that specify the charity and amount for each QCD I made in 2022. Is this the required documentation? However, I have no acknowledgements from the charities due to the issue I described: no info provided by TIAA regarding my address was provided with the checks.

The way I understand things are:

1. If the brokerage removes funds from a TDA, cuts the check and sends it directly to a charity then the acknowledgment letter is not required.

2. If the brokerage cuts the check, sends it to you, you send it to the charity, Charity cashes check, then funds are removed from the TDA an acknowledgment letter is required..

3. If you cut a check, send it to the charity, Charity cashes check, then funds are removed from the TDA an acknowledgment letter is required..

I have a few years before QCDs and hope they streamline the process……

WoodSpinner

[delamer]

I found this, which seems pretty clear cut, assuming it is accurate (beware of what you read online, even on Bogleheads ):

What are the Rules?

Unlike most tax-related rules, the rules for QCDs are fairly straightforward:

You must be age 70½ or older.
The QCD must be made from a traditional IRA, Roth IRA, or individual retirement annuity, but not from a simplified employee pension, a simple retirement account, or an inherited IRA.
The QCD must be a direct transfer from the IRA trustee to the charitable organization.
The organization must qualify for a charitable income tax deduction of an individual, that is, no private foundations (i.e., that give out grants).
The organization must acknowledge the charitable contribution similar to a charitable income tax deduction or donor-advised fund.

Source: https://www.robertprussocpa.com/qualifi ... from-iras/

[sport]

If you or your custodian send a check to a charity, it may not meet the requirements for a QCD. You could have bought something from the charity. Perhaps someone else donated a vehicle to the charity and the charity sold it to you. To qualify for a QCD, the letter from the charity must state that nothing of value was provided in exchange for the payment. So, you must always have a proper letter of acknowledgement from the charity. If my return was audited, I would surely want such a letter. Accordingly, it does not seem that a proper QCD can be made anonymously.

[prd1982]

I believe QCDs can be made from inherited IRAs.

In addition the acknowledgement letter must indicate that the donor got nothing of tangible value. That is different than a regular donation. For a regular donation you can deduct the difference.

[Fremdon Ferndock]

If you or your custodian send a check to a charity, it may not meet the requirements for a QCD. You could have bought something from the charity. Perhaps someone else donated a vehicle to the charity and the charity sold it to you. To qualify for a QCD, the letter from the charity must state that nothing of value was provided in exchange for the payment. So, you must always have a proper letter of acknowledgement from the charity. If my return was audited, I would surely want such a letter. Accordingly, it does not seem that a proper QCD can be made anonymously.

Do you have access to a draft of a proper letter of acknowledgement? It would seem to me that it might be advisable to send something along to the charity that they can fill in the blanks and return. I would surmise that not every charity is familiar with the needed protocol.

[Geologist]

I believe QCDs can be made from inherited IRAs.

In addition the acknowledgement letter must indicate that the donor got nothing of tangible value. That is different than a regular donation. For a regular donation you can deduct the difference.

I get acknowledgement letters all the time for regular donations that (accurately) say that I received nothing of tangible value. Therefore QCD's are not different from a situation that charities deal with for regular donations.

[sport]

If you or your custodian send a check to a charity, it may not meet the requirements for a QCD. You could have bought something from the charity. Perhaps someone else donated a vehicle to the charity and the charity sold it to you. To qualify for a QCD, the letter from the charity must state that nothing of value was provided in exchange for the payment. So, you must always have a proper letter of acknowledgement from the charity. If my return was audited, I would surely want such a letter. Accordingly, it does not seem that a proper QCD can be made anonymously.

Do you have access to a draft of a proper letter of acknowledgement? It would seem to me that it might be advisable to send something along to the charity that they can fill in the blanks and return. I would surmise that not every charity is familiar with the needed protocol.

The various letters I have received are not all the same. I am looking at one such letter I received recently. It states the date, the amount, and payment method. At the bottom of the letter is a boilerplate statement:
Please retain this receipt for tax purposes. The XXX is a 501(c)(3) non-profit organization. Tax ID xx-xxxxxxx. In keeping with IRS guidelines, we verify that no goods or services have been provided to you in return for the amount of your gift, unless otherwise specified. As each donor's situation is different, we recommend that you consult your tax advisor in determining your tax deduction.
I have another such letter that spells out it is for a QCD. The letters are all a little different.

[Fremdon Ferndock]

More than one charity I support is pretty small and probably pretty unsophisticated. Should I assume they know the correct language for an acknowledgement or provide them with something?

[delamer]

I contacted Charity Navigator, and got a very quick response:

Donations made through the Giving Basket are processed by Give Lively, our partnered payment processor. Give Lively, a nonprofit donor-advised fund securely distributes donations from donors to the charities they selected. Since this process is not done in-house by Charity Navigator, we do not have the capacity to act as a distributor for your IRA, RMD, QCD, etc funds.

[prd1982]

I believe QCDs can be made from inherited IRAs.

In addition the acknowledgement letter must indicate that the donor got nothing of tangible value. That is different than a regular donation. For a regular donation you can deduct the difference.

I get acknowledgement letters all the time for regular donations that (accurately) say that I received nothing of tangible value. Therefore QCD's are not different from a situation that charities deal with for regular donations.

You misunderstood my comment

For a regular charitable deduction if you give the charity $100, and get a $40 item of value (say a ticket to a game) you can deduct $60. If you give a QCD check, you cannot make a $60 QCD deduction. You can take as a charitable deduction assuming you itemize.

Hope that clears up my statement.

[Agent 99]

More than one charity I support is pretty small and probably pretty unsophisticated. Should I assume they know the correct language for an acknowledgement or provide them with something?

The QCD rules are very specific. I would make sure the charity words it exactly as required. You probably should verify the charity is allowed by the IRS to receive QCDs as well. There are criteria that are different than non QCD charitable contributions.

Here’s a sample letter:

https://covenanttrust.com/wp-content/up ... Sample.pdf

[delamer]

More than one charity I support is pretty small and probably pretty unsophisticated. Should I assume they know the correct language for an acknowledgement or provide them with something?

The QCD rules are very specific. I would make sure the charity words it exactly as required. You probably should verify the charity is allowed by the IRS to receive QCDs as well. There are criteria that are different than non QCD charitable contributions.

Here’s a sample letter:

https://covenanttrust.com/wp-content/up ... Sample.pdf

Are the letters needed as evidence of a properly done QCD in case of an audit?

Or are they filed with your return?

[jebmke]

More than one charity I support is pretty small and probably pretty unsophisticated. Should I assume they know the correct language for an acknowledgement or provide them with something?

The QCD rules are very specific. I would make sure the charity words it exactly as required. You probably should verify the charity is allowed by the IRS to receive QCDs as well. There are criteria that are different than non QCD charitable contributions.

Here’s a sample letter:

https://covenanttrust.com/wp-content/up ... Sample.pdf

Are the letters needed as evidence of a properly done QCD in case of an audit?

Or are they filed with your return?

Only if requested, not with return

[delamer]

More than one charity I support is pretty small and probably pretty unsophisticated. Should I assume they know the correct language for an acknowledgement or provide them with something?

The QCD rules are very specific. I would make sure the charity words it exactly as required. You probably should verify the charity is allowed by the IRS to receive QCDs as well. There are criteria that are different than non QCD charitable contributions.

Here’s a sample letter:

https://covenanttrust.com/wp-content/up ... Sample.pdf

Are the letters needed as evidence of a properly done QCD in case of an audit?

Or are they filed with your return?

Only if requested, not with return

Thanks; that’s what I suspected.

[Agent 99]

Deleted

[delamer]

Thanks to all those who provided helpful responses.

It struck me that the only information that the recipient of the QCD would be supplied are our name and address. It’s not as if my cell phone would be included in the acknowledgment letter.

Although I’m not naive enough to think that my phone number and/or e-mail would be undiscoverable.

[jebmke]

Thanks to all those who provided helpful responses.

It struck me that the only information that the recipient of the QCD would be supplied are our name and address. It’s not as if my cell phone would be included in the acknowledgment letter.

Although I’m not naive enough to think that my phone number and/or e-mail would be undiscoverable.

You will be on lists that get circulated to other charities so you will get more mail. If it is large amount and especially local charities you will suddenly find yourself invited to events and receive telephone calls.

[Agent 99]

I make all our QCDs directly from my tIRA at Fidelity. Ask your custodian how to donate anonymously.
I only use Charity Navigator to check out the charity's score.
Keep good records as QCDs only show up as the difference between line 4a and 4b on your 1040. My tax guy adds "QCD" in the empty space between between lines 3b and 4b.

I find that only half of the charities send an acknowledgement. I rely on my Fidelity report which lists the QCDs.

The Fidelity QCD Form states “you should follow up directly with charity for receipt…”

https://www.fidelity.com/bin-public/060 ... drawal.pdf

[delamer]

Thanks to all those who provided helpful responses.

It struck me that the only information that the recipient of the QCD would be supplied are our name and address. It’s not as if my cell phone would be included in the acknowledgment letter.

Although I’m not naive enough to think that my phone number and/or e-mail would be undiscoverable.

You will be on lists that get circulated to other charities so you will get more mail. If it is large amount and especially local charities you will suddenly find yourself invited to events and receive telephone calls.

“No good deed goes unpunished” in the flesh.

I currently get an unconscionable amount of mail from St. Jude’s.

[prd1982]

“No good deed goes unpunished” in the flesh.

I currently get an unconscionable amount of mail from <name here>.

That’s why I switched to give more money to fewer charities.

I do distinguish between US mail and email. I’m fine with frequent email. This doesn’t cost the charity much money or me much time to handle. I wish charities would let us ask to only get email.

[delamer]

“No good deed goes unpunished” in the flesh.

I currently get an unconscionable amount of mail from <name here>.

That’s why I switched to give more money to fewer charities.

I do distinguish between US mail and email. I’m fine with frequent email. This doesn’t cost the charity much money or me much time to handle. I wish charities would let us ask to only get email.

The waste of respurces with snail mail is pretty appalling.

Donating more to fewer charities also is better overall in terms of bang-for-your-buck.

[Bogle7]

The Fidelity QCD Form states “you should follow up directly with charity for receipt…”

But, I don’t and so far, no IRS problems.

[sport]

The Fidelity QCD Form states “you should follow up directly with charity for receipt…”

But, I don’t and so far, no IRS problems.

As long as you do not get audited, the IRS does not know whether or not you have the receipt. However, should you get audited, they can ask for it. I don't want to push my luck and the charities are happy to send me a thank you letter.

[Agent 99]

The Fidelity QCD Form states “you should follow up directly with charity for receipt…”

But, I don’t and so far, no IRS problems.

As long as you do not get audited, the IRS does not know whether or not you have the receipt. However, should you get audited, they can ask for it. I don't want to push my luck and the charities are happy to send me a thank you letter.

The IRS learns of the QCD from the individual’s tax filing. The 1099-R doesn’t specify that a QCD was made. It just shows that an RMD was distributed. Even if the Fidelity statement (for ex) shows the QCD for that tax year without the charity acknowledgement the IRS could take the position that there is no evidence that the charity received/cashed the check in that tax year. If you ever have the pleasure of being audited by the IRS it will quickly become clear that they will only accept the documentation specified in their regulations no matter how convincing another document might be.

[jebmke]

The Fidelity QCD Form states “you should follow up directly with charity for receipt…”

But, I don’t and so far, no IRS problems.

As long as you do not get audited, the IRS does not know whether or not you have the receipt. However, should you get audited, they can ask for it. I don't want to push my luck and the charities are happy to send me a thank you letter.

The IRS learns of the QCD from the individual’s tax filing. The 1099-R doesn’t specify that a QCD was made. It just shows that an RMD was distributed. Even if the Fidelity statement (for ex) shows the QCD for that tax year without the charity acknowledgement the IRS could take the position that there is no evidence that the charity received/cashed the check in that tax year. If you ever have the pleasure of being audited by the IRS it will quickly become clear that they will only accept the documentation specified in their regulations no matter how convincing another document might be.

It happens. I helped a friend respond to a CP letter that was specific to IRA distributions. Fortunately he had all the acks. He also had some basis so the difference between gross and taxable had two components.

[IowaFarmBoy]

I do not understand the statement "The amount of QCD contribution limits for exclusion reduce after age 70 1/2." Please explain to this old mind.

If you make a contribution to an IRA after age 70.5, it reduces what can be excluded later until the contribution is clawed back.

Does this apply to both Roth and tradition contributions or only traditional? I found Kitces article on this and it specifically discusses traditional contributions as a problem but doesn't mention Roth.

My situation is that I am generally retired (currently 64) but have a very small amount of ongoing W-2 income that I have been contributing to a Roth IRA. We plan to start QCDs from an inherited IRA belonging to my wife after she is 70.5 and I will start QCDs after I turn 72.5. I can easily stop the Roth contributions at that point if necessary.

[jebmke]

I do not understand the statement "The amount of QCD contribution limits for exclusion reduce after age 70 1/2." Please explain to this old mind.

If you make a contribution to an IRA after age 70.5, it reduces what can be excluded later until the contribution is clawed back.

Does this apply to both Roth and tradition contributions or only traditional? I found Kitces article on this and it specifically discusses traditional contributions as a problem but doesn't mention Roth.

My situation is that I am generally retired (currently 64) but have a very small amount of ongoing W-2 income that I have been contributing to a Roth IRA. We plan to start QCDs from an inherited IRA belonging to my wife after she is 70.5 and I will start QCDs after I turn 72.5. I can easily stop the Roth contributions at that point if necessary.

I would think only traditional. The intent is to block using an IRA as a real-time conduit for charitable contributions.