[How do I send my Qualified Charitable Distribution to a charity]?

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TheCreeker
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[How do I send my Qualified Charitable Distribution to a charity]?

Post by TheCreeker » Sun Apr 22, 2018 5:56 am

[Moved into a stand-alone post from What is best strategy for taking RMD from VG IRA --admin LadyGeek]

I want my RMD QCD to be sent directly to the charity of my choice. Does Vanguard not do this?

RudyS
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by RudyS » Sun Apr 22, 2018 10:46 am

There was discussion on this in the original thread. You can request Vanguard to make the distribution, or if you have check writing in your IRA, you can write a check directly to the charity.

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TheCreeker
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by TheCreeker » Mon Apr 23, 2018 6:58 am

Thank you so much for your reply.

I re-read the original thread and I see where the RMD/QCD issue was thoroughly discussed. When I first read the thread, my biggest concern was with writing the checks myself. I see now that this is the best option to make sure the donation is sent, and cashed, in a timely manner.

I will ask VG to send me a couple of QCD checks.

Thanks again for your help.

RudyS
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by RudyS » Mon Apr 23, 2018 8:20 am

TheCreeker wrote:
Mon Apr 23, 2018 6:58 am
Thank you so much for your reply.

I re-read the original thread and I see where the RMD/QCD issue was thoroughly discussed. When I first read the thread, my biggest concern was with writing the checks myself. I see now that this is the best option to make sure the donation is sent, and cashed, in a timely manner.

I will ask VG to send me a couple of QCD checks.

Thanks again for your help.
To clarify: Vanguard provides a book of "checks" which you write to whomever. Maybe for a QCD, maybe just a withdrawal. There are no "QCD checks" as such. I've done this for several years now. Also, while you can track the progress of your donation, you can't ensure that the charity will actually cash it timely. Best to do this well before year-end.

tomd37
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by tomd37 » Mon Apr 23, 2018 8:29 am

Creeker - I have been doing QCDs for the past nine years in those years when it was available under IRS rules. I just set up a telephone appointment with my VG representative, email him a list of the nine QCD recipients and amount for each the day before the call, and then he reviews that list with me on our recorded call and sends me the checks the next day or two. I make a copy of the checks and mail them to the charity under an explanatory cover letter (in memory of our son). Checks range from $250 to $2000. Not sure if VG has a lower dollar limit for a check.

Don't forget that your total QCD for any given year will be reflected on the 1099-R you receive from the investment firm and it is up to you to reflect the correct amounts on line 15 (a and b) on your 1040 form.
Tom D.

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TheCreeker
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by TheCreeker » Mon Apr 23, 2018 9:30 am

Rudy and Tom,

Thanks very much for sharing your expertise with me.

Creeker

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Sheepdog
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by Sheepdog » Mon Apr 23, 2018 9:37 am

tomd37 wrote:
Mon Apr 23, 2018 8:29 am
Checks range from $250 to $2000. Not sure if VG has a lower dollar limit for a check.
In regards to lower check limits, I know of none when requested from Vanguard. I have had checks written from $50 to $5000. However, self written checks from my IRA checkbook are limited to a low of $250.
Jim
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

Engineer
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by Engineer » Mon Apr 23, 2018 9:48 am

To clarify, will a Vanguard 1099-R show the gross RMD (say 100,000) in Block 1 and in Block 2a, the RMD less the total of all QCDs (say 20,0000) or 80,000 in Block 2a?

Thanks

tomd37
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by tomd37 » Mon Apr 23, 2018 9:52 am

Gross amount will appear in boxes 1 and 2a
Tom D.

Engineer
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by Engineer » Mon Apr 23, 2018 9:59 am

Therefore the 1099-R does not reflect the QCD?

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Sheepdog
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by Sheepdog » Mon Apr 23, 2018 10:20 am

Engineer wrote:
Mon Apr 23, 2018 9:59 am
Therefore the 1099-R does not reflect the QCD?
The 1099R does not reflect the QCD. You reflect it yourself when you complete your 1040.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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CABob
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by CABob » Mon Apr 23, 2018 10:29 am

Engineer wrote:
Mon Apr 23, 2018 9:59 am
Therefore the 1099-R does not reflect the QCD?
The 1099-R includes the QCD but does not separately identify it as such. The number includes QCD and any withdrawals made sent to you or a fund you specify.
There was mention about check writing against a fund. It should be noted that check writing is only available from certain funds, generally money market and bond funds.
And there is a minimum amount of checks, I believe it is $250.
Bob

tomd37
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by tomd37 » Mon Apr 23, 2018 10:30 am

Sorry, lost my response to Engineer. Most tax software programs will ask questions about 1099-R distributions and if you answer those questions correctly the total distribution will reflect on line 15a and the taxable amount on line 15b with the abbreviation QCD just to the left of line 15b. If you do your return manually you will have to make those entries manually.

I volunteer in the free AARP Foundation Tax Counseling for the Elderly Tax-Aide program preparing returns for seniors. In that program it asks questions about non-taxable income and when I enter the information correctly it results in the action described above. I did my own return in the program and am looking at it as a type this.
Tom D.

mptfan
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by mptfan » Fri Dec 14, 2018 5:16 pm

RudyS wrote:
Mon Apr 23, 2018 8:20 am
To clarify: Vanguard provides a book of "checks" which you write to whomever. Maybe for a QCD, maybe just a withdrawal. There are no "QCD checks" as such. I've done this for several years now.
Thank you for this information. Does this only apply to the new Vanguard brokerage accounts, and does it matter how your IRA is invested? Do you have to have cash in your settlement account to cover the check?

RudyS
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by RudyS » Fri Dec 14, 2018 10:16 pm

The checkbook is specific to the Prime Money Market fund in my IRA. It is the "new" brokerage account but I don't know if that's necessary, so long as it is an IRA.

fourwheelcycle
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by fourwheelcycle » Sat Dec 15, 2018 8:24 am

TheCreeker wrote:
Sun Apr 22, 2018 5:56 am
I want my RMD QCD to be sent directly to the charity of my choice. Does Vanguard not do this?
As others have clarified, Vanguard will only send requested QCD checks, made out to your charities, to you. You will have to mail or otherwise deliver them to your charities.

If you write your own QCD checks on eligible funds in your Vanguard IRA you will still have to deliver them to your charities, but you will take on the additional responsibility to secure a receipt from each charity that indicates your donation was received during the same tax year you wrote the check.

I suppose Vanguard's transaction confirmations for the cashed checks could also be your receipts, but I think those would be dated when Vanguard processed the checks, not when you wrote them or delivered them to your charities.

kaneohe
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by kaneohe » Sat Dec 15, 2018 9:14 am

fourwheelcycle wrote:
Sat Dec 15, 2018 8:24 am
............................

If you write your own QCD checks on eligible funds in your Vanguard IRA you will still have to deliver them to your charities, but you will take on the additional responsibility to secure a receipt from each charity that indicates your donation was received during the same tax year you wrote the check.

............................................
Are you saying that if VG writes the QCD checks you don't have that same responsibility to get the receipts?
I thought you needed them in any situation.

fourwheelcycle
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by fourwheelcycle » Sat Dec 15, 2018 9:32 am

kaneohe wrote:
Sat Dec 15, 2018 9:14 am
Are you saying that if VG writes the QCD checks you don't have that same responsibility to get the receipts?
I thought you needed them in any situation.
I do save the receipts charities mail to me, but, probably like most people, I have never had to submit any of them to the IRS.

I just turned 70 1/2 and did my first round of QCD check requests online at Vanguard. When the checks arrived, only three days later, each check was a perforated tear-off at the bottom of an 8" x 11" check confirmation that showed the check number, the date and amount of the check, the name of the charity, and my name, address, and Vanguard account number. I am saving the check confirmations in my tax records. I expect they will serve as my best receipts if any of the charities happen to cash my checks in 2019 and send me receipts that do not indicate my donation was received in 2018.

mptfan
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by mptfan » Sat Dec 15, 2018 9:50 am

I am trying to understand the mechanics of making QCD charitable contributions from a Vanguard IRA and the various options that are available, could someone confirm if my understanding is correct...

1) You can request QCD distributions online through the Vanguard website. No need to call. Vanguard will then send you a physical check in the mail made payable to the charity that you selected and you then give the check to the charity.

viewtopic.php?t=243615

2) You can request QCD distributions by calling Vanguard and speaking to a representative and Vanguard will send a physical check in the mail that you deliver to the charity.

3) You can write your own checks from your own checkbook with a minimum of $250 per check made payable to the charity, assuming you have the checkwriting service set up in your IRA account. In this case, I think you have to have funds either in a brokerage settlement account or the prime money market account, and the checks are tied to a particular fund?

https://personal.vanguard.com/us/whatwe ... ng?lang=en

Also, my understanding is that there are no "QCD checks" as such, all checks from your IRA are included in your total IRA distributions for tax purposes, and it does not matter how you choose to make the QCD charitable contribution because either way it's up to you, not Vanguard, to make the appropriate designation of the amount of your QCD when you file your return.
Last edited by mptfan on Sat Dec 15, 2018 10:00 am, edited 3 times in total.

MathIsMyWayr
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by MathIsMyWayr » Sat Dec 15, 2018 9:55 am

If you write a QCD check when you approach the top of RMD and withdraw more shortly after, how do you prove that the QCD check was indeed a part of RMD, not after?

kaneohe
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by kaneohe » Sat Dec 15, 2018 10:15 am

fourwheelcycle wrote:
Sat Dec 15, 2018 9:32 am
......................................................... I am saving the check confirmations in my tax records. I expect they will serve as my best receipts if any of the charities happen to cash my checks in 2019 and send me receipts that do not indicate my donation was received in 2018.
I suspect that we will all be subject to the whims of IRS if this happens. https://www.thebalancesmb.com/tax-deduc ... ns-2501942 claims that the deduction is valid for the yr when check was mailed to charity. I keep the check confirmations like you do and keep my own handwritten record of mailing but certainly have no proof of that date of mailing.

This yr I mailed the checks in late October. By a wk ago (6 wks later), 4 mavericks had not acknowledged. 3 had a record of the check in their systems and promised to send receipts. 1 claimed no record and broker acknowledged that check was not cashed.......so stopped and re-issued check. Kind of like a part-time job.

fourwheelcycle
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by fourwheelcycle » Sat Dec 15, 2018 10:49 am

kaneohe wrote:
Sat Dec 15, 2018 10:15 am
This yr I mailed the checks in late October. By a wk ago (6 wks later), 4 mavericks had not acknowledged. 3 had a record of the check in their systems and promised to send receipts. 1 claimed no record and broker acknowledged that check was not cashed.......so stopped and re-issued check. Kind of like a part-time job.
Hmm.....

I just looked at my Vanguard account; they deducted the amounts of my QCD checks on the date they were confirmed. I suppose Vanguard will make a small fortune on the float until the charities cash my checks. I wonder if Vanguard will let me know if any of the checks are never cashed.

I also wonder if I can claim 2018 QCDs for any checks that need to be re-issued in 2019, or if I could face IRS penalties for claiming non-existent QCDs on my 2018 tax return, or for missing my first RMD (after April 1, 2019). There is a line about "I am an old man with many worries, most of which have never happened".

kaneohe
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by kaneohe » Sat Dec 15, 2018 11:16 am

fourwheelcycle wrote:
Sat Dec 15, 2018 10:49 am
................................................................
I also wonder if I can claim 2018 QCDs for any checks that need to be re-issued in 2019, or if I could face IRS penalties for claiming non-existent QCDs on my 2018 tax return, or for missing my first RMD (after April 1, 2019). There is a line about "I am an old man with many worries, most of which have never happened".
:happy Love that last line and hope it continues to be true...................don't know the answers to your questions
(and you're not the first to worry about them). ....thought it was better not to have to know the answers so that's why
I got that part-time job.......better to prevent than to fix.

trueblueky
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by trueblueky » Sat Dec 15, 2018 4:26 pm

https://www.irs.gov/newsroom/know-these ... e-donation

I don't see how checks you write on a VG account would count. A check of $250 or more is not acceptable as proof of a donation.

RudyS
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by RudyS » Sat Dec 15, 2018 5:03 pm

I am not a tax professional, but it is my opinion that the date of your QCD is the date that the check is paid by Vanguard. Vanguard's 1099-R reflects your total distributions for the tax year. You then identify how much is a QCD. I don't know how checks not cashed by year-end are treated. This isn't the same as the effective date for tax payments, other contributions, etc., which are effective as of the date mailed.

mptfan
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by mptfan » Sat Dec 15, 2018 5:23 pm

trueblueky wrote:
Sat Dec 15, 2018 4:26 pm
https://www.irs.gov/newsroom/know-these ... e-donation

I don't see how checks you write on a VG account would count. A check of $250 or more is not acceptable as proof of a donation.
According to the IRS source you cited...

"Donations of $250 or More. If taxpayers donated cash or goods of $250 or more, they must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether they received any goods or services in exchange for the gift."

That does suggest that *just* having proof of a check payment is not enough, you need a statement from the charity. But how would it be different if Vanguard printed the check made payable to the charity and mailed it to you, and then you gave it to the charity? Wouldn't you still need a statement from the charity? So going through the process of requesting a QCD check from Vanguard does not help satisfy the IRS requirement of getting a statement from the charity any more than writing a check yourself.

sport
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Re: [How do I send my Qualified Charitable Distribution to a charity]?

Post by sport » Sat Dec 15, 2018 5:48 pm

I sent a check written by Vanguard to one charity. After a month or two, I had not received an acknowledgment. So, I asked the charity about it. They claimed no knowledge of the donation. So, I contacted Vanguard and they told me the check was never cashed. So, they stopped payment on that one and issued a replacement. I don't know if Vanguard would ever have notified me that the check was not cashed.

That raises another question. What happens to the money if a check is never cashed? Does it revert to my account? Does it go to unclaimed funds in my name? Does it go to unclaimed funds in the charity's name? Does Vanguard just keep the money?

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