How to show charitable contributions from a traditional IRA

[macuser_22]

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@MKCDAC wrote:

I had the same problem last year.  Although actual date of birth is in July, I had to make it June 30.  I think the program has a problem with the age 70 and a half calculation. 

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Yes, I have confirmed the bug and submitted it to the moderators to give to the developers.   It seems that they chanced the program to allow the QCD for age 72 but overlooked the half year between 70 1/2 and 72.

However, it you had the problem last year then you are a year older in 2021 so you should now be 72 which works fine.

[lomprey2016]

I made a Charitable distribution directly to a 401 3(c) in December 2021 from my TSA.  I turned 70.5 in May of 21.  How do I enter this 1099R in Turbo Tax.  The program does not have an option for explaining that this amount is tax exempt.   

Followup:  Workaround: changed the DOB to make taxpayer over 72 and entered the QDC which now Turbo Tax has a popup menu and noted that item was tax exempt.  I then went back and entered the correct DOB that reflects 70 1/2.

[ErnieS0]

@lomprey2016 Qualified charitable distributions (QCD) can only be made from individual retirement accounts (IRAs).

You can transfer money from a 403(b) to an IRA and then make a QCD.

Another option is to make a charitable contribution after withdrawing money and entering the amount in Deductions & Credits.

See Making a Charitable Donation with a 403(b) RMD

[reg66]

The glitch in TT in this regard with my situation (and others Im sure) is this;  I am not 72.  However, I am the owner of a beneficial IRA account that requires me to take RMDs each year since the original holder was way past 72 and had been taking RDMs for years.

Both my financial advisor and tax advisor told me that I could make QCD with those RMDs and I have done so for the past 3 years.

Quicken's test is just my age.  If I am not 72, then I can not be asked the QCD questions.  The only way for me to do it is to take them, and since they show as a fault, I have to print and mail my returns.  A giant pain and slow.

Has this glitch been fixed for 2023?

[dmertz]

Although TurboTax had problems with this in the past, the CD/download version of TurboTax has handled this correctly in the 2020, 2021 and 2022 versions of TurboTax.  It's unlikely that the developers will have broken this in 2023 TurboTax.

[reg66]

I must respectfully disagree.  Those are the years that the problem existed for me.  I was just hoping there was a difference this year.

[dmertz]

Each of those works fine for me.

[dmertz]

@reg66 , perhaps I misunderstood your situation.  To be eligible to make a QCD from the inherited IRA maintained for your benefit, you must be age 70½ or over.  The age of the decedent is not a factor.

If on past tax returns you reported making QCDs from the inherited IRA but you were not age 70½ or over at the time of the distribution, you must amend those tax returns to remove the QCD claim and instead report the distributions as ordinary distributions and claim the charitable contributions as ordinary charitable contributions.  (However, keep in mind the statute of limitations on the IRS's ability to make an assessment of taxes, either 3 years or 6 years depending on the amount.)

Prior to the developers correcting TurboTax's behavior in 2020, TurboTax mistakenly based eligibility to make a QCD on the age of the decedent instead of on the age of the beneficiary.  If those prior versions of TurboTax allowed you to report these distributions as QCDs, perhaps this mislead you to mistakenly believe that eligibility to make a QCD was based on the age of the decedent.