What forms are required to support a Qualified Charitable Distribution?

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1210sda
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What forms are required to support a Qualified Charitable Distribution?

Post by 1210sda » Sat Jan 13, 2018 10:52 am

I believe that Vanguard (if that's where you have your IRA) will send you a 1099-R showing the amount distributed, coded "7" Normal Distribution. This amount is to be entered on line 15a of Form 1040.

Then, on line 15b of the 1040, you enter the taxable amount. This amount is your gross distribution less your QCD's. You also indicate on Line 15b "QCD".

Questions:
1. If the above is correct, what paperwork is there to support the reduction from 15a to 15b? Does Vanguard send out a summary of your QCD's for the year? Or, do you have the responsibility of keeping copies of the QCD checks you received from Vanguard? Does the IRS get any information about your QCD's from Vanguard?

2. I'm a little confused by a comment I've seen in the past...."The first distribution from an IRA goes toward satisfying the RMD". Does this mean that I can't do a QCD until after the first distribution? :confused

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pshonore
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Re: What forms are required to support a Qualified Charitable Distribution?

Post by pshonore » Sat Jan 13, 2018 11:07 am

1. You have to keep track (at least with Fido)

2. QCDs count as RMDs provided they are completed before your RMD amount is exceeded.

RMD is 10K, take out 5K as RMD, 5K is left for QCDs

RMD is 10K, take out 5K as QCD, 5K is left for QCDs or RMDs

RMD is 10K, take out 10K as RMD, 0K is left for QCDs

kaneohe
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Re: What forms are required to support a Qualified Charitable Distribution?

Post by kaneohe » Sat Jan 13, 2018 11:08 am

1) Don't know about VG but my broker send the checks to me along w/ a list of the checks listing payee and amount. The checks have attached to each a form w/ similar info.
2) The QCD can be simultaneously a QCD and RMD so it is good to do them "early" before the RMD is satisfied. If you satisfy the RMD before you take any QCDs, the QCDs still work but you will have withdrawn RMD + QCD from the TIRA.....more than necessary. If you start the QCD "early" then you only have to withdraw RMD amount from TIRA.

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dodecahedron
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Re: What forms are required to support a Qualified Charitable Distribution?

Post by dodecahedron » Sat Jan 13, 2018 11:15 am

kaneohe wrote:
Sat Jan 13, 2018 11:08 am
2) The QCD can be simultaneously a QCD and RMD so it is good to do them "early" before the RMD is satisfied. If you satisfy the RMD before you take any QCDs, the QCDs still work but you will have withdrawn RMD + QCD from the TIRA.....more than necessary. If you start the QCD "early" then you only have to withdraw RMD amount from TIRA.
But don't start your QCD too early! In the year that you turn 70 1/2, you have to wait until you actually do turn 70 1/2 before making a QCD. (An RMD can be taken as early as January 1 of that year, but it will not be a QCD unless you wait until after your half birthday.)

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dodecahedron
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Re: What forms are required to support a Qualified Charitable Distribution?

Post by dodecahedron » Sat Jan 13, 2018 11:18 am

kaneohe wrote:
Sat Jan 13, 2018 11:08 am
1) Don't know about VG but my broker send the checks to me along w/ a list of the checks listing payee and amount. The checks have attached to each a form w/ similar info.
That is nice to hear. It would be good to hear a list of IRA custodians who do this.

My plan when I (hopefully) reach 70 1/2 will be to take and save pictures of the checks written directly by the custodian to the charity before forwarding the checks on to the charity AND to maintain copies of their thank you letters substantiating that they did indeed receive my gift *and* that they did not give me any goods or services in return for my donation.

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BL
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Re: What forms are required to support a Qualified Charitable Distribution?

Post by BL » Sat Jan 13, 2018 11:33 am

Your plan should be fine (never be audited).

I call Vanguard with a list of charities and amounts.
They send to charity in care of me the check with supporting info.
I copy it for our records and send on to the charity.
Hopefully the charity sends back acknowledgement.

One can do up to 100k/year QCD, so not limited to RMD.
We did about 10% last year, but Star Fund gained more than that, so can't seem to empty it (our goal even though not necessarily wise financially, but it is small due to Roth conversions before QCD made permanent.)

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