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QCDs and RMDs

According to Publication 590 (2009 edition), it was possible in 2009 (and earlier years) for an IRA owner to instruct the IRA custodian to distribute money from the IRA directly to a charity (Qualified Charitable Distribution or QCD). The sum would count as part (or all) of any Required Minimum Distribution (RMD) but would neither increase the AGI nor be deductible as a charitable contribution on Schedule A. Publication

590 says that this feature was expiring at the end of 2009 and was not available for 2010 and future years.

Has this feature has been reinstated (for 2010 or only for 2011 and beyond, or for two more years) in the new tax law just enacted? I am aware that it is possible to receive the RMD from the IRA and send it to the charity as a charitable contribution deductible on Schedule A, which makes no difference to the charity which gets the same sum either way. But the RMD increases AGI and MAGI which could affect other taxes, Medicare premiums and the like.

Thanks for any information on this matter.

--Dilip Sarwate

Reply to
dvsarwate
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Yes, the qualified charitable distribution rules have been put back for 2010 and 2011. I'm not where I can easily look up the 2012 situation.

As before, it applies only to taxpayers already drawing their RMD and only when paid directly by the IRA custodian to the charity.

The QCD can include the RMD and the QCD amount is deemed to come from your pretax funds first.

If you're thinking of doing this for 2010 there's still a few days left in 2010. So long as the distribution from the IRA occurs by 12/31/10 it counts.

Reply to
Arthur Kamlet

That would be your crystal ball. This was one of the year-to-year provisions that's good only through 2011. It's kind of tricky, because official Washington is doing a lot of chest thumping about their fantastic achievement of doing "2 year" provisions. Unfortunately, one of those years is 2010.

They threw in a twist on this one. You have until 1/31/2011 to do such a distribution and have it count towards your 2010 RMD. They didn't provide a do over for people who had already taken their RMD's.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Reply to
Phil Marti

At one point the January 31 provision was in a bill. I did not realize it had passed.

Reply to
Arthur Kamlet

Section 725 of the bill.

Reply to
Alan

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