IRA Rollover

Archive for November, 2008

Question: If I make an IRA charitable rollover to my church for $1000, is it deductible?

I understand it is not shown as taxable income on my 1040, but can I also take it as a deduction of $1000 on schedule A charitable giving??

Answer: Great question!!! Ordinarily, no, unless the Qualified Charitable Distribution (QCD) includes an amount attributable to the recovery of your money already taxed (non-deductible contributions), if any.

C’mon guys! You know you can’t have your cake and eat it too. IRS will not allow a deduction for income that was never taxed. According to their example in Pub 590, practically speaking, the only portion of your QCD that may be deductible is any recovered basis (non-deductible contributions).

“He cannot take a charitable contribution deduction for the portion of the distribution that was not included in his income. You cannot claim a charitable contribution deduction for any QCD not included in your income.” Pub 590

Hope that helps.

PLEASE VOTE to avoid a TIE. On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your “Best” Answer. We really appreciate it.

DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual, nor shall it be considered a solicitation for business. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

Bradley Mann, CFP®, EA, BCE, CFS, AAMS
Certified Financial Planner™ Practitioner
Enrolled Agent | Admitted to Practice before the IRS
Board Certified in Estate Planning

How To Make A Tax Free Transfer From Your IRA