IRA Charity

[Golden Rocket]

I hate to admit to being so igonernt, but this is my first exposure to direct pay from an IRA to a charity, and I'm having problems with the nuts and bolts.

My understanding is that the money can be directly paid out of the IRA to a charity, and the amount of distribution is NOT taxable to the recipient, but neither can the recipient deduct the amount on a Sch A.

If my understanding is correct, a distribution of $9000 to the taxpayer and $1000 to a charity should result in:

1099-R from custodian with $10,000 shown as total distribution and $9000 as taxable amount.

I have such a 1099-R for 2012 but the "taxable amount" has not been reduced by the charitable amount.

Am I missing something? If I'm wrong, how do I report this?

[Burke]

They are all showing up this way since Congress did not approve the QCD until January of this year, and made it retroactive. My input for 1099-R has a box to check way down at the bottom and a place to indicate the QCD amount. This results in the net amount showing as taxable with "QCD" printed to the side on the 1040.

[DonPriebe]

Actually the 1099-R has always shown the full amount in both the gross and the taxable boxes. The theory is that the fiduciary simply has distributed the moneys as the taxpayer directed, and has no responsibility to assure that the "Golden House for Inner Peace" is a legitimate 501(c)3. As mentioned above, the taxpayer uses the QCD notation on his return to show the reason for the difference between the gross and taxable amounts.

[Burke]

When this law was first passed, I have a client who did this, and has done it every year since. The QCD amount did not show up on her 1099-R at all the first couple of years. Just the amount which was paid to her. Perhaps they have changed the rule about reporting it, or the payor just figured out how to do it correctly.