4 QCD Rules That May Surprise You

4 QCD Rules That May Surprise You

By Sarah Brenner, JD
Director of Retirement Education

A qualified charitable distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity, income-tax free. If you are thinking this might be a good strategy for you, here are 4 QCD rules that may surprise you.

1. You must be age ½ or older. IRA owners who are age ½ and over are eligible to do a QCD. Sounds easy, right? This is more complicated than it might sound. A QCD is only allowed if the distribution is made on or after the date the you actually attain age ½. It is not enough that you will attain that age later in the year.

QCDs are not limited to IRA owners. If you are an IRA beneficiary, you may also do a QCD. All the same rules apply, including the requirement that you must be age ½ or older at the time the QCD is done.


Q: I inherited a regular IRA upon my mother's death in 2015. I am now 75 years old and have been taking required distributions since then. She was taking distributions herself when she died. My question is: may I close out this IRA now by taking out the entire balance and paying taxes on it? Thanks.


Q: I have just read as many questions and answers as I could on The Slott Report and am still very confused. Simply put, I am over 80 years old, and I have had a Roth and a traditional IRA for many years. My daughter is the sole beneficiary of those IRAs and is in her 50s. Will my daughter have to take an annual RMD from both my Roth and traditional IRA when she inherits, as well as emptying my accounts within the 10-year period? Hope you can clear up my confusion. Thanks.


Q: I have enjoyed for years your seminars and newsletter. Last year Congress proposed to end the "Backdoor" Roth strategy. My question on this strategy for this year is, do we implement this with our clients or not? Are you aware of any tax proposals that target eliminating the Backdoor Roth? Or does it look like a safe strategy to employ again in 2022?


Q: Can an RMD from an inherited IRA be taken out of your own traditional IRA?


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