Qualified Charitable Distribution, The Check's Address

Technical topics regarding tax preparation.
#1
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I have a client that is very upset because the trustee of his annuity IRA (Allianz) will write a check with the payee as "XYZ Church", but the address just below the payee (on the actual check) is the client's address and NOT the church's address. I advised this was just fine, and the distribution would still qualify as a QCD. Did I give good advice?

P.S. The distribution otherwise qualifies as a QCD.
Last edited by mammondee on 26-May-2020 3:42pm, edited 1 time in total.
 

#2
Kris S  
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I had a client do one of these in 2019. He received a gift receipt from the charity (it was not a church) thanking him with the following language plus the amount, date and what charity generally does.

We affirm that we received your gift directly from your plan trustee/administrator and that it is your intention for all of your gift to qualify as a qualified charitable distribution from your IRA under section 408(d)(8) of the Internal Revenue Code.

The (…charity…) is qualified under section 170(b)(1)(A) of the Internal Revenue Code, and your gift was not transferred to either a donor advised fund or a supporting organization as described in section 509(a)(3).

We further affirm that no goods or services of any value were or will be transferred to you in connection with this gift. Please retain this letter with your Important tax documents and provide a copy to your tax preparer.



The following is a article about QCD.

https://www.journalofaccountancy.com/is ... tions.html


About the address, maybe the following in Notice 2007-7 will be helpful:

Q-41. Is a check from an IRA made payable to a charitable organization described in § 408(d)(8) and delivered by the IRA owner to the charitable organization a direct payment to such organization?

A-41. Yes. If a check from an IRA is made payable to a charitable organization described in § 408(d)(8) and delivered by the IRA owner to the charitable organization, the payment to the charitable organization will be considered a direct payment by the IRA trustee to the charitable organization for purposes of § 408(d)(8)(B)(i).
 

#3
lucyko  
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I wonder if your client is aware that there is no minimum required distribution for 2020 and if that fact would influence his/her decision to make a qualified charitable distribution this year. I have 3 clients who routinely contribute their RMD to a charity via a qualified charitable distribution, but 2 of the 3 won't be doing it this year because of the stock market drop.
 

#4
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That is not the case in this situation. The client will contribute (SUBSTANTIALLY more than their RMD) no matter what.
 

#5
Nilodop  
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I may have missed it, but I see no answer so far to OP's question. Allianz obviously goofed, but I don't see how that hurts the QCD at all, assuming of course that the check is not cashed or somehow used by any party other than the XYZ Church.
 

#6
Kris S  
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I thought I thought I answered mammondee question but maybe not. The check from the IRA is payable to the charity and the client could deliver it to the church.

About the address, maybe the following in Notice 2007-7 will be helpful:

Q-41. Is a check from an IRA made payable to a charitable organization described in § 408(d)(8) and delivered by the IRA owner to the charitable organization a direct payment to such organization?

A-41. Yes. If a check from an IRA is made payable to a charitable organization described in § 408(d)(8) and delivered by the IRA owner to the charitable organization, the payment to the charitable organization will be considered a direct payment by the IRA trustee to the charitable organization for purposes of § 408(d)(8)(B)(i).


My other point is that the client needs a contemporaneous written acknowledgment for the gift which should show the gift was received by the church shortly after the withdrawal. My client donated to a 501(c) charity and received a gift acknowledgement that confirmed the donation was from an IRA.
 

#7
Nilodop  
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I thought I thought I answered mammondee question but maybe not.. Yes you did. Careless reading on my part.
 


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