Has anyone ever used part of RMD to donate to chrity (QCD)?

[question everything]

We did it last year the first time. Now we got our 1099 from Vanguard and it reports the whole amount withdrawn as taxable.

Is it the responsibility of the fiduciary to separate the two amounts?

I dread trying to call them this time of year.

Watch for Vanguard on the next post..

[progree]

1. I'm curious - what was the distribution code in box 7?

I'm planning on doing this (QCDing my RMD), I think, this year for the first time, on my inherited IRA at Fidelity. So I'm worriedly watching what you're going thru.



Chat might get through quicker -- hopefully a simple explanation. Hopefully that TurboTax can properly handle too.

Edited to add: prior discussion (January 3) on QCD's at https://www.democraticunderground.com/11213582 -- I needed this as a reminder as to what I was thinking of doing when I last thought hard about it (I have two kinds of IRA's - an inherited IRA and a regular Traditional IRA - that have and will soon have RMD requirements, so it gets confusing to me).

[question everything]

2. Code on Box 7 is 7 which means normal distribution. Also the IRA box is checked

I had good results with simple questions on Vanguard Facebook. I will see if there is special phone for tax documentations.

But, not on Monday. These are the worst time to try to call any organization..

[progree]

3. Thanks. I notice on my IRA Roth conversions, it has "7" in box 7. So there is hope

i.e. something relatively complicated like a Roth conversion (or a QCD) shows up as a "7 normal distribution" and somehow all is well.

Though in a Roth conversion, the amount is truly taxable and I pay tax on it. (I'm trying to think if there is ANY 1099 that indicates a Roth conversion took place, or if that's just something I declare on box whatever on my 1040 under penalty of perjury and death). 1040 Box 4a "IRA distributions" and I guess it's up to me to provide documentation that I legally did a Roth conversion or something-like-that.

For QCD's I don't see something on 1040 where one declares a QCD amount and that somehow reduces taxable income, but I didn't look hard. Sigh.

EDITED TO ADD - just did a Google on "ira rmd qcd and form 1099-r"

and the gist of it after looking at a couple results - it says it shows up as a normal distribution on your 1099-R and you tell your tax advisor the amount of IRA distributions that were QCDs

-- Another one --

How do I report QCD on my taxes?
To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter "QCD" next to this line.

[question everything]

4. Thanks. Just found this one on Vanguard

Generally, a QCD is a direct transfer of funds from an IRA owned by an individual over age 70 ½, payable directly to a qualified charity, as described in the QCD provision in the Internal Revenue Code. The maximum annual distribution amount that can qualify for a QCD is $100,000.

In general, QCDs must be reduced by the amount of deductible IRA contributions made for the year you turn 70 ½ or later. This limit would apply to the sum of QCDs made to one or more charities in a calendar year. The QCD is excluded from your taxable income. The QCD will be reported as a normal distribution on your 1099-R for any non-Inherited IRAs. For Inherited IRAs, the QCD will be reported as a death distribution.

You should keep an acknowledgement of the donation from the charity for your tax records because you'll also need to report the QCD on your tax return. Information about how to report QCDs on your income tax return is available on the IRS website.