IRS Adds New Reporting Code for Charitable IRA Gifts

I read this Morningstar article this morning. I thought I had posted it then. Although is not pertinent to me I know it is to other HD readers.

Until now, however, QCDs came with a thorny reporting headache. They were reported on IRS Form 1099-R as a regular distribution from an IRA, with no indication that the amount was a QCD.

Effective 2025, an IRA custodian may enter Code Y in Box 7 of Form 1099-R to show that the amount represents a QCD. Code Y is paired with another distribution code to provide more detail:

Code 7 for a QCD from a noninherited (normal distribution) IRA.
Code 4 for a QCD from an inherited IRA.
Code K for a QCD involving traditional IRA assets without a readily available fair market value. Colloquially referred to as “self-directed IRAs.”

Here is the web address for the article:

https://www.morningstar.com/retirement/irs-adds-new-reporting-code-charitable-ira-gifts?utm_source=eloqua&utm_medium=email&utm_campaign=AdvisorDigest&utm_content=None_69161&utm_id=35965

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