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IRA distribution

  • 1.  IRA distribution

    Posted 05-17-2021 06:12 PM
      |   view attached

    I've seen a lot of threads around on IRA distributions, but I wanted to make sure I understand what we received correctly. I basically need an "IRA for dummies" low down. Would the attached be considered an RMD or QCD (or neither)? Also, would you record it under Schwab's account? Bank of America? The donor's account? When sending the acknowledgment I'm assuming we would leave in the tax verbiage...although I'm not sure if it functions similar to a DAF in that Charles Schwab issues a tax receipt. I've never really had this explained to me, so I would really appreciate any help. Thank you!



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    Leah Heit
    Database Coordinator
    Community Action Partnership of Orange County
    leahcheit@gmail.com
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  • 2.  RE: IRA distribution

    Posted 05-17-2021 07:04 PM
    IRA distributions are often difficult to wade through - so don't worry about finding a book to explain them!

    There is, however, one pretty basic truth:  Whatever form of distribution it is, the donor is the individual.  That's the I in Individual.  And neither Schwab nor BoA gets any form of recognition credit.

    Generally, all IRA distributions result in a "standard" gift receipt to the individual.  It is, however, useful to indicate whether the distribution is an RMD or a QCD as both require different tax treatments by the donor.  So, I recommend amending the receipt to say something like, "Thank you for your IRA RMD/QCD (choose one) contribution."

    In this case, I'd consider the payment to be an RMD as that's what I think of when I see the word "normal."  QCDs are a little less normal.  But if there's is any doubt, I'd ask either Schwab or the donor.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: IRA distribution

    Posted 05-18-2021 10:41 AM
    Thank you so much! This is super helpful. It's hard to find documents out there on exactly how to record these types of gifts :) especially in this much detail

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    Leah Heit
    Database Coordinator
    Community Action Partnership of Orange County
    leahcheit@gmail.com
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  • 4.  RE: IRA distribution

    Posted 05-17-2021 07:26 PM
    Hi Leah- 

    We created a guide that explains the basics in plain english (along with some pointers for marketing these types of gifts). 

    You can view it here at no cost: 
    https://imarketsmart.com/ira-rollovers/

    Hope you find it useful.


    Greg

    MarketSmart Logo
    GREG WARNER | CEO & FOUNDER
    p: 301.289.3670 x174  e: gwarner@imarketsmart.com
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    Click here to schedule a meeting with me!





  • 5.  RE: IRA distribution

    Posted 05-18-2021 10:42 AM
    Thank you for linking this. It's super comprehensive, and I love the part about how to market :)

    ------------------------------
    Leah Heit
    Database Coordinator
    Community Action Partnership of Orange County
    leahcheit@gmail.com
    ------------------------------