What can be done? RMD withdrawal $9,000. $6.000 sent directly to a church. How to handle?
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How to handle what? Maybe provide some info as to what you're asking about."Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen -
Client does not itemize. Is there a way to deduct the contribution? Was not to clear in my post. ThanksComment
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QCD rules apply. Also keep records of the donation date, the account from which the donation came, the amount that was given, and the charity that received the donation. Also requires a receipt from the charity stating that the donor received no goods or services in exchange for the contribution. Itemization not required. Reduce taxable amount by QCD.
Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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Your post appears to be referring to a Qualified Charitable Distribution or QCD made from an IRA.
If the 6K was distributed to the church directly from the IRA and the taxpayer meets all of the
other QCD requirements (see page 4-20 TTB), the 1099-R will show the $9-K as a taxable distribution.
Your software should have a place on the data entry screen that will allow you to designate 6-K
of the 9K IRA distribution as a QCD. This should result in 9K gross and 3K taxable on the 1040.
You'll want to ensure that your taxpayer met all of the QCD requirements before you designate the 6-K as such.
Amounts given (tax free) via QCD cannot also then be deducted on schedule "A" or as a 1040 charitable contribution.Comment
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How can you possibly know that with the information provided?Originally posted by ATSMAN View Post
There were no RMDs for 2020.Originally posted by taxitc View Post
Who did the direct sending? The taxpayer, or the IRA trustee? "The QCD cannot be distributed to the taxpayer and then donated, it must be transferred directly to the charity."
"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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If your client did not qualify for the donation to be a QCD, he still can get a $300 deduction above the line if he's a non-itemizer.
Obviously, you first want to see if the donation fits the QCD requirements. If so, follow your software's method of data entry for a QCD which, as has has been explained above, reduces his income/AGI but does not appear as an itemized deduction.Comment
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Just what I needed. Thanks to all repliers. If it works after exploring all, you made his day. AND I appreciate your help. I passed right over it last night in the TTB.Originally posted by RWG1950 View PostComment
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I am asking the poster to check QCD rules. I don't know if they qualify or not!Originally posted by Rapid Robert View PostTaxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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on page 4-20 in the example it talks about Phil's age of 72 in 2020, then talks about ($10,000 -$8,000) AND $ 8,000 of the distribution would be taxable income and $2,000 would be qcd AND $8,000 onOriginally posted by taxitc View Post
Schedule A, Than full amount of a qdc up to $100,000 ????? That must mean he makes NO IRA contributions in the following year 2022. Right?Comment
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The IRA trustee sent it direct. Taxpayer never say the check. Drake has a way to handle. I found letter showing direct to the Church. ThanksOriginally posted by ATSMAN View PostComment
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