Why doesn't a QCD show up in the "Tax schedule" for the year.

YOBO

I enter as a Sell transaction which then shows a cash balance. I then enter a transfer transaction with category of "Charitable Contributions" But it does not show up when I run the "Tax Schedule" report

MontanaKarl

Having a hard time understanding the problem from your post.  You can only Sell in a brokerage account, so I assume that's what you're asking about.  But, transfers cannot be made to expense categories... only to accounts.  I assume you mean that you entered a deposit/payment transaction (if a brokerage) - with the Charitable Contributions category.  If so, then there shouldn't be an issue.

On the other hand, the standard/delivered QMac category for charitable contributions is "Gifts & Donations > Charity" with these tax line associations:





If you created the category "Charitable Contributions" yourself, you need to open the Categories window, and edit that category to association the Schedule A tax line with it.

jacobs

The fundamental problem is that you created a transfer transaction and entered a category on it. This is a loophole in Quicken Mac, as it violates the rules of accounting: transfers move money between accounts but are neither income nor expense. the creators of Quicken Mac have said they will prevent categorized transactions at some point, but the loophole still exists. But such transactions don't work correctly in some reports, which are not programmed to expect categories on transfer transactions.

That said, can you clarify the nature of this transaction? You said you sold shares of an investment and transferred the proceeds to another account of yours, but want it to count as a charitable contribution? Where did the charitable contribution take place? If you send a check to a charitable organization, the check to the charity is where you'd enter the category for a charitable contribution. Or did you donate shares of an appreciated security directly to a charitable entity? 

YOBO

Yes I donated it to a charitable institution from an IRA, to be a QCD(Qualified Charitable Distribution) and the check was made out to the institution. The transaction show up when a report for charitable category is generated, but when I run the "Tax Schedule" report it does not appear.

jacobs

The tax report does not show many types of transactions in retirement accounts, because they are not taxable events (such as dividends and capital gains). For instance, Quicken Mac doesn't have a transaction type geared around taxable withdrawals, such as RMD or Roth conversion IRA withdrawals, which require a work-around to show up on a tax report. Making a charitable donation from a retirement account is the same issue; the Tax Report is built to ignore retirement accounts.

Edit: my original reply below included a work-around for making the QCD show up as a charitable deduction. But @MontanaKarl correctly pointed out in the next post below that a QCD is not a charitable deduction; it is a reduction of the taxable amount of the RMD. 

Since Quicken does not have a way to include RMDs on a tax report without a bit of a hack work-around, you may or may not find it okay to simply ignore the QCD transaction. Quicken doesn't report it as a taxable withdrawal from your IRA, and it is not. So your tax liability is shown correct int he tax report. But for doing your taxes, it's not quite that simple, because you need to not include the QCD as an IRA distribution (which is usually taxable) on Form 1040 and that line as QCD. So if you want these amounts called out on a Quicken tax report, you'll have to create some dummy transactions as a hack to get this information reported. My thought it that since you can get the QCD information via a category report, perhaps don't worry that it's not in the tax report since the QCD is not a taxable event.

MontanaKarl

@YOBO I think another workaround from what @jacobs suggests is to create a dummy checking account whose purpose is only to process QCD's from your IRA (which are a great tax benefit to for us old folks)...

I was going to propose a fake checking account with a transfer in from the IRA and an immediate wash 'payment' out.  But... an IRA QCD does NOT count as a charitable contribution for tax purposes!  What it does is allow you to take your IRA RMD and then NOT pay ordinary income tax on it.  A huge benefit to us old folks... but totally different from a charitable contribution - which is limited, and requires itemization, and for which a QCD is not permitted.

If you are not 72 (or whatever the new RMD age will be this year for newly affected people) - then it is wise to NOT make a QCD until you ARE required to make RMDs to obtain the maximum tax benefit.

To the best of my knowledge anyway.

PS. Apologies for not paying attention to your use of the term QCD in the original post!

https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity

YOBO

MontannaKarl. Your explanation of QCD from IRA and a normal charitable contribution not being the same was something I had not thought of. This was the first year that I did a QCD. To clarify, I cannot claim the QCD as a charitable deduction. The benefit is not paying ordinary tax on the IRA redemption. This would be double dipping, correct

MontanaKarl

@YOBO Glad that I could help.  And, yes the benefit of not paying ordinary income tax on the full or partial RMD is a great benefit for those of us who would contribute to charity anyway... since the elimination of income tax is totally independent of itemization.  People taking the standard deduction still get this QCD benefit.