QCD question

[NECPA in NEBRASKA]

One of my clients is having an issue with Wells Fargo and their QCD. First, WF wanted to print blank checks on their checkstock and have my client write them to the charity. I said no, that WF should print them.  Now WF wrote the checks like this: Charity

                                                                                     Taxpayer name

                                                                                     Her address

Does this seem ok? I just didn't think that her name should be on the check as payee at all, but maybe I am being too picky.

Thanks!

Bonnie

 

 

 

[Abby Normal]

"The QCD can’t be distributed to you first and then donated; instead, the money must be transferred directly to the charity, and if a check is issued, it must be made payable to the charity."

https://www.kiplinger.com/article/retirement/T054-C000-S004-ira-qcd-rules-qualified-charitable-distributions.html

[NECPA in NEBRASKA]

Thanks! That is what I thought. I just found out that it is not Wells Fargo. My clients had used WF previously for their QCDs but changed to a local financial company.  This guy is apparently clueless and does not want to take the time to look anything up. 

I told them to have him reissue the checks again and to try to do it correctly.

Bonnie

[Lee B]

22 minutes ago, Abby Normal said:

"The QCD can’t be distributed to you first and then donated; instead, the money must be transferred directly to the charity, and if a check is issued, it must be made payable to the charity."

Exactly, just had Charles Schwab do precisely that for my own QCD's earlier this month.

[Catherine]

Tell the local guy that with the new, higher, standard deduction, this is going to become a LOT more common.  If he wants to keep his clients, he NEEDS to figure this out.  It's not rocket science.

[SaraEA]

Vanguard has warned its clients to make a copy of the check.  Theirs are payable to the charity from the "IRA of ...."  and sent to the taxpayer.  The entire distribution will be on the 1099R, with no indication that a QCD was made, so I anticipate CP2000s down the road.  The copy of the check might be the only proof.

[Catherine]

12 hours ago, SaraEA said:

no indication that a QCD was made

That's actually all too common.  And we end up having to back it off either on the IRA line or the other income line (whichever is easiest in our own software).  

[Randall]

Also, tell the WF rep to check with WF tax department or higher ups.  Get it right before the checks are issued.

 

[Abby Normal]

I've never had a QCD not done correctly by the trustee. For me the biggest problem is ensuring the client doesn't include, and we don't deduct, the charitable contribution. That is WAY to easy to do.