Qualified Charitable Distributions: Today's Slott Report Mailbag | Ed Slott and Company, LLC

Qualified Charitable Distributions: Today's Slott Report Mailbag

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on Twitter: 
@theslottreport


Question:

Hi Ed, 

My question: 

Is there any way to do a charitable distribution from my IRA before I reach RMD age? I am recently retired and 65 years old. 

Thanks!

Marty


Answer:

Marty - The number-one requirement to be able to do a Qualified Charitable Distribution (QCD) is that the IRA account owner must be 70 ½ years old. We are not talking about the year in which you turn 70 ½, we are talking about actually being 70 ½. In fact, even on inherited IRAs, where the deceased account owner may have already reached 70 ½, it does not change the fact that the current account owner of the inherited IRA must also be 70 ½ before they can do a QCD. Indeed, you could take a taxable withdrawal from your IRA and subsequently donate the funds to charity, but it would not be a “QCD.”


Question:

Hi,

Can I make a QCD from my employer-sponsored plans 403b, 457 and federal thrift plans or only from my IRA plans?

Thanks for your help.


Answer:

QCDs can only be taken from IRA accounts. QCDs are also not available from active SEP or SIMPLE plans, but are allowed from inactive SEP and SIMPLEs. (The IRS defines an inactive SEP or SIMPLE as one that is not receiving a contribution for the year of the QCD.) If you have access to your workplace dollars, you are permitted to roll over all or a portion of those monies to an IRA and then take the QCD from the IRA. But be careful! If you are looking to offset the work plan RMD with a QCD, it can’t be done. RMDs cannot be rolled over. The plan RMD would need to be taken first. Then, anything above and beyond the plan RMD amount could be rolled over to an IRA where a QCD could then be done.

 

 

 

 


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to matt@irahelp.com for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at matt@irahelp.com or (516) 536-8282 with any questions.

 

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.
 

I agree to the terms and services:

You may review the terms and conditions here.