How to Report a Tax-Free Transfer From an IRA to Charity

Your IRA administrator should have sent you a Form 1099-R, but you’ll also need to specify on your return that your distribution was a tax-free transfer to charity.

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Kimberly Lankford
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Question: I transferred my required minimum distribution from my IRA to charity in 2016, and I am wondering how to report the transfer on my tax return. Do I need to keep any records from the transfer?

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Answer: Your IRA administrator should have sent you a Form 1099-R reporting the distribution, although the form won’t specify that the distribution was a tax-free transfer to charity. Report the transfer on line 15a of your Form 1040 as a gross distribution from your IRA. On line 15b, write $0 for the taxable amount (if you don’t have any taxable distributions from your IRAs for the year). Add “QCD,” for “qualified charitable distribution,” next to that line to show why the distribution is tax-free. If only part of your distribution was a QCD, put the taxable portion on line 15b and still add “QCD” to explain the difference between line 15a and 15b. (For more details, see the instructions for Form 1040.)

At age 70 ½ you need to start taking required minimum distributions from your retirement accounts. You can choose to transfer up to $100,000 each year from your IRAs to charity tax-free, which counts as your RMD but isn’t included in your adjusted gross income.

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You should also keep an acknowledgement of the gift from the charity in your tax files. If you haven’t received one yet, contact the charity with the date and amount of the gift and your contact information. The IRA administrators don’t always make it clear who made the donation when transferring money from the IRA to the charity, and you’ll need to let the charity know to send you the receipt. Keep the 1099-R form and the acknowledgement of the gift from the charity in your tax files.

For more information about the reporting rules, see the IRS’s FAQs Regarding IRA Distributions and Withdrawals. For more information about RMDs, see our Required Minimum Distribution special report.

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Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.