I received my 1099-R for 2019. The total distribution and the taxable amounts are the same. I made substantial contributions to charities using QCD’s. I had expected that the taxable amount would be the total distribution less those contributions.
How do I enter this?
Your investment firm does not know whether or not you contributed to a qualified charitable organization. Therefore the amount reported on the 1099-R is your full distribution amount. It is up to you to report the RMD correctly by reporting both the full distribution amount on one line and the same amount less the QCD as taxable income on that same line to the right. If doing your return manually you must indicate to the left of the taxable amount the notation QCD. Most software programs will make that notation for you if you properly indicate the full and taxable amount and that there was a QCD.
That is correct if you are manually preparing a paper return. As I indicated previously, most software programs will ask about a reduction to the taxable amount for a QCD and make the appropriate annotation somewhere on the return that a QCD was made. Its placement can vary based on the program. Tom D.
Note that if your IRA contains basis from non deductible contributions, you must complete Form 8606 EXCLUSIVE of the QCD to determine the taxable amount that goes on line 4b. This instruction recognizes that the QCD amount comes solely from the pre tax IRA balance, while the rest of the distribution is pro rated to reflect the IRA basis.
In other words, the IRA Custodian ignores both your basis and the QCD in completing the 1099R, and the taxpayer is responsible for applying both of these variables.
This reply was modified 1 year, 8 months ago by Alan S..