Custodian Issued QCD Check is not cashed, how to proceed

Forum|Forum|2 years ago
June 5, 2024
1 reply
25 views

A client issued a QCD to meet the 2023 RMD via a custodian-issued check. The $1,000 check was not cashed within 6 months, and the $1,000 was thus redeposited by the custodian back into the IRA. Thus the RMD was not met. I understand that form 5329 part 9 needs to be created and filed to reflect the missing RMD dollars, thus requesting a waiver of the $1,000 RMD miss. But does an amended 1040 need to be generated? The custodian will not report any amended 1099, so no income change is reported.

I do understand the $1,000 needs to be distributed from the IRA immediately, and does NOT count towards this years RMD.

And can a 5329 be filed by itself without a 1040X

This topic has been closed for replies.

Best answer by PhoebeRoberts

Ugh.

I vote no 1040X, because "RMD plus QCD" and "no RMD" both result in the same answer of no taxable income, and the IRS doesn't want a 1040X for no change in taxable income or tax liability.

5329 can 100% be filed free-standing. It goes on paper.

As a practical matter, my mom's second year doing QCDs, she had the custodian mail the check to her and she sent it on to the charity with a note of explanation. And she does all her QCDs in January - if the check doesn't clear, it gets redeposited in the same year and that charity comes off her list. QCDs are a great idea in theory, but they are a big hassle.

PhoebeRoberts

Answer

Intuit Community Champion

Ugh.

I vote no 1040X, because "RMD plus QCD" and "no RMD" both result in the same answer of no taxable income, and the IRS doesn't want a 1040X for no change in taxable income or tax liability.

5329 can 100% be filed free-standing. It goes on paper.

As a practical matter, my mom's second year doing QCDs, she had the custodian mail the check to her and she sent it on to the charity with a note of explanation. And she does all her QCDs in January - if the check doesn't clear, it gets redeposited in the same year and that charity comes off her list. QCDs are a great idea in theory, but they are a big hassle.

R

rbpyleAuthor

Level 2

Thanks for that. One last question (I hope)( the 5329 is straightforward in this case, but can I as the paid preparer just put the paid preparer info (with PTIN and signature). or does the original taxpayer need to sign?

PhoebeRoberts

Intuit Community Champion

Taxpayer needs to sign, alas.

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