RMD donations

Forum|Forum|5 years ago
February 10, 2021
3 replies
38 views

I have charitable contributions in cash that I made with money from the RMD from my IRA. What are the requirements for this deduction? The monies came to me and were comingled with other funds and then dispersed to the charities. Does this still qualify to be entered in "I made charitable donation area after entering the proceeds from the IRA as my RMD? Because it allows the deduction off the top of taxable income. But if it must just be entered as a charitable donation then the credit for the donation is much lower because that is figured after determining taxable income. What are the requirements to qualify for an RMD amount reduction for monetary charitable donation?

ColeenD3

Level 15

Unfortunately, once the distribution is made, it not longer qualifies. The plan, itself, must distribute the money.

A QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity. QCDs can be counted toward satisfying your minimum required distributions (MRDs) for the year, as long as certain rules are met.

You can claim a donation on Schedule A under the Gifts to Charity section.

Manually enter your charitable donations directly into TurboTax:

Open your return in TurboTax.
In the search box, search for donations and then select the Jump to link in the search results.
Answer No when asked if you have an ItsDeductible account (even if the answer is yes).
Answer Yes to Do you want to enter your donations for 2020?
Follow the instructions to enter your donations.

nivelderf

Level 2

It is not clear whether your instructions apply to QCD situation, which is the one of interest to me. I will try it out presently and see if it reduces the amount of my RMD by the correct amount.

PattiF

Level 15

To report a qualified charitable distribution on your Form 1040 tax return, you'll use the 1099-R (even though there's no indication that it was a QCD). Enter the info as a 1099-R and you'll be asked in one of the follow-up questions if it was a Qualified Charitable Distribution.

TurboTax includes the full amount of the distribution reported on your Form 1099-R on line 4a (IRA Distributions) of your Form 1040. The taxable amount reported on Line 4b will be the total distribution less the QCD amount and will have "QCD" entered next to it.

Some Rules

You don't have to itemize to make a QCD and you cannot claim a charitable contribution deduction for any QCD not included in your income.
QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income.
A distribution made directly to the IRA owner, who then gives it to a charity, doesn't qualify as a QCD.

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