What is the advantage of directing an RMD to a charity when the 1099 shows the full amount of distribution

Forum|Forum|6 years ago
January 28, 2020
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BillM223

Level 15

Line 4a on you 1040 will show the full amount reported on the 1099-R.

Line 4b should show only the taxable amount (i.e., the total distributions from all IRAs less the QCD). This is the benefit of a QCD because your taxable income is reduced.

Note that you are allowed to make excluded QCD distributions only if you are at least 70 1/2 by the end of the tax year.

Also note that you can make QCD distributions only from a traditional or inherited IRA.

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dmertz

Level 15

And to be a QCD the charitable contribution must be paid directly from the IRA to the charity. A distribution paid to you that you later you use to make a charitable contribution is reportable on Schedule A, not as a QCD, and may or may not reduce your tax liability depending on the total of your itemized deductions. relative to the standard deduction.