By Ian Berger, JD
IRA Analyst
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Question:
Hi,
Thank you for all the helpful insight on retirement. I wish I heard about your website earlier. I turned 72 last year and followed your advice on QCDs (qualified charitable distributions) but don’t know how to claim it.
My RMD (required minimum distribution) was $50k in 2022. I did a QCD of $10k and then withdrew $40k by the end of 2022. My taxable amount should be $40k and not $50k as listed on the 1099-R. How do I reflect that in my tax filing?
Thank you for your assistance.
Elly
Answer:
Hi Elly,
Thanks for the kind words. This is a question that trips up a lot of people. That’s because custodians are not required to indicate on the 1099-R which part of the annual IRA distribution was a nontaxable QCD. Instead, it’s up to you to show that on the 1040. In your case, enter $50,000 on line 4a (“IRA distributions”), but only $40,000 on line 4b (“Taxable amount”). You must also enter “QCD” next to line 4b. (Tax preparation software should handle that for you.)
Question:
Is there a limit on the number of IRA rollovers you can do in a given year? Are the rules different for trustee-to-trustee transfers?
Thanks,
Paul
Answer:
Hi Paul,
Yes, there is a limit. You can’t do a rollover of a distribution that you received within 12 months of a distribution that you previously rolled over (i.e., the “once-per-year rollover rule”). This limit applies across all your IRA accounts. It applies to traditional IRA-to-traditional IRA rollovers and Roth IRA-to-Roth IRAs, but not to company plan-to-IRA rollovers, IRA-to-plan rollovers or traditional IRA-to-Roth IRA rollovers/conversions. You can avoid this rule entirely by doing trustee-to-trustee (direct) transfers, rather than 60-day rollovers. There’s no limit on transfers.
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https://www.irahelp.com/slottreport/qcd-reporting-and-once-year-rollover-rule-today%E2%80%99s-slott-report-mailbag