Is There an Age Requirement to Go Through with a Qualified Charitable Distribution? | Ed Slott and Company, LLC

Is There an Age Requirement to Go Through with a Qualified Charitable Distribution?

By Beverly DeVeny and Jeffrey Levine
Follow Us on Twitter:
@theslottreport

The qualified charitable distribution (QCD) questions keep rolling in - and we aren't surprised. After all, the QCD provision is one of the biggest breaks in the tax code and it's of tremendous value to the charitably inclined. In this week's Slott Report Mailbag, we also walk a reader through the general IRA beneficiary provisions in a community property state. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.


1.

I have a question regarding QCDs in 2016. A report says you must be age 70 ½ to take a qualified charitable distribution. If an individual turns ago 70 (birth date 5/29/46) and reaches 70 ½ on 11/29/16, is the earliest QCD distribution date January 1, 2016 (the year the individual turns 70 ½) or 11/29 (the date they reach age 70 ½?)

Thank you for clarifying the tax ruling.

Lynette

Answer: 
The individual must be age 70 ½ at the time of the QCD transaction. In your example, the individual should wait until November 30, 2016 before doing the QCD transaction. Beneficiaries can do a QCD too, but they must also be age 70 ½ at the time of the distribution.


2.

I have a question about an IRA that was left designating a son as the sole primary beneficiary in the community property state of Texas. The father left an IRA to the son, but also has a trust set up to pay for the home and bills for his spouse. He named his son as the sole primary beneficiary, but the spouse has claimed half of the IRA account. Does the son have a "realistic" option to contest the spousal claim in Texas?

Answer:
This is more of a legal question than an IRA question. Generally in a community property state, a spousal waiver must be signed before a beneficiary form naming a non-spouse beneficiary is accepted by the IRA custodian. The beneficiary should consult with an attorney to explore his options.

Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner

 


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.