Treatment of QCDs as part of reported IRA distributions

[CA_Joe]

In 2017, I have made several substantial contributions from my IRA that constitute Qualified Charitable Deductions (QCDs).

My mutual fund company (MFC) treats these amounts as “normal distributions” and does not provide any break-out to me or the IRS of the QCD amounts.  I interpret this to mean the amounts MFC reports on Form 1099, lines 1 & 2a, will be the same.

MFC’s position is that it is up to me to retain copies of checks showing payees and amounts, implicitly deal with this on audit.  I posited unsuccessfully that MFC should provide this and not force me as taxpayer to bear the full burden of proof.

My question of Intuit / TurboTax / User Community, as to filing my 1040 for calendar 2017: HOW SHOULD I SHOW AMOUNTS ON MY ACTUAL RETURN?

My thinking is to show on TT Form 1099, lines 1 and 2a, the same net amount AFTER deducting QCDs.  I have clear documentation showing that the QCD amounts were paid to a 501c3, not to me.

In testing this using TurboTax 2016, I get a curious result if instead I show the full normal distribution on Form 1099, line 1 and the net amount on line 2a.  The calculated federal tax is way more than if I simply use the net amount after QCDs on both lines 1 and 2a.  Strange!

[Critter]

You are thinking too hard.  Simply enter the 1099-Rs as they are printed ..then simply follow the interview in that section to indicate how much was a QCD & the program will do the rest automatically. 

[dmertz]

When you enter the Form 1099-R, enter it exactly as reported on the Form 1099-R.  TurboTax will ask if any of the amount reported on the Form 1099-R was transferred to charity.  Answering Yes will cause TurboTax to ask you the amount of this that was QCD.  TurboTax will include the entire distribution on From 1040 line 15a or Form 1040A line 11a but will exclude the entered QCD amount from the taxable amount reported on line 15b or line 11b.  TurboTax will show the letters "QCD" next to this line.

Since a QCD can only be made from an IRA, make sure that you are marking the IRA/SEP/SIMPLE box on TurboTax's 1099-R form and that the birthdate that you entered indicates that you were at least age 70½ by the end of the year (the end of 2016 since you are using 2016 TurboTax), otherwise TurboTax will not ask the QCD questions.

[dmertz]

If you reached age 70½ in 2017, using 2016 TurboTax you'll need to enter your birth year as being one year before your actual birth year, otherwise TurboTax will treat the distribution as having been received before you reached age 70½, before the age that you become eligible to make a QCD.

[CA_Joe]

Voila, success!  After altering b/d, got the TT questions I'd not seen.  And, got expected tax result.  Thx.

[Critter]

Ok ... so it was just a simple b/d entry error.... simple fix.

[Billbennie]

I did enter it as reported.  It was all directly contributed to charities.  How do I get that deduction/

[Billbennie]

It did not ask me if it was contributed to charity 

[Billbennie]

OK, I have to start over. I'm 78

[garyrwest]

2021 Turbo Tax does not ask a question, so where do I go from here?

[DoninGA]

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@garyrwest wrote:

2021 Turbo Tax does not ask a question, so where do I go from here?

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This is an old thread with different types of questions being asked.  What question are you referring to?