Re-charactization of a 2020 QCD
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
pstuverud
Returning Member

Re-charactization of a 2020 QCD

Back in January, 2020 I made a Qualified Charitable Distribution (QCD) from my IRA as part of the  RMD requirement.

 

Then, several months later, under the SECURE act, the IRS removed the 2020 RMD and allowed previously made distributions to be reversed if done by Aug 31.

 

Can I reverse the charitable distribution, too? Specifically, can I transfer the donation amount from my taxable account to the IRA as a rollover and then re-characterize the donation as a Schedule  A itemized charitable deduction instead of a QCD? It might make more sense tax-wise.

 

Any issues?

 

Thanks,

Paul

 

5 Replies
Critter-3
Level 15

Re-charactization of a 2020 QCD

That is a valid option ... if it works for you then go for it.  

macuser_22
Level 15

Re-charactization of a 2020 QCD

You cannot "recharacterize"  a RMD,  you can roll is back into the IRA account as a CARES act rollover.    Any money already sent to a charity by the IRA custodian is gone, however, if you replace that money with other funds then you can rollover the entire amount.      If rolled over then you will not be able to claim the QCD and get the tax break - it would simply be an out-of-pocked charitable donation that can be a schedule A itemized deduction if you have enough deductions to itemize.

 

Just because you make a charitable donation from an IRA does not make it a QCD until you claim it as such and nothing requires you to claim it as a QCD at all.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SteamTrain
Level 15

Re-charactization of a 2020 QCD

Removed this entry: ...missed thinking about ALL the proper details !

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
rjs
Level 15
Level 15

Re-charactization of a 2020 QCD

@SteamTrain  The OP is not just choosing to not claim the QCD. He's also returning the amount of the QCD to the IRA as a rollover. So he will show the distribution as a rollover on his tax return instead of as a QCD. But the bottom line is the same. It won't be included in his AGI, so it won't affect Medicare premiums or taxable Social Security.

SteamTrain
Level 15

Re-charactization of a 2020 QCD

@rjs 

 

Dang...Of course....obviously I needed another day to think about it.

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
v
Privacy Settings