QCD available for beneficiary over 70.5
IRA Owner dies in 2011 after his RBD and did not satisfy RMD prior to death
Beneficiary is over 70.5
Can the beneficiary complete a QCD for the 2011 RMD amount?
I recognize the beneficiary can complete the QCD for an Inherited IRA RMDs for future years (as long as the QCD is available), but this question is specific to the year of death RMD.
Thank you!
Permalink Submitted by Alan Spross on Mon, 2011-05-16 22:33
The IRS Notices do not specifically address this scenario, but there is no reason to think that the beneficiary could not use the QCD to cover the RMD of the decedent. IRS Notice 2007-7 is clear that
a QCD can be taken from an inherited IRA as long as the beneficiary has reached 70.5 to the day.
We also know that the beneficiary is responsible for the decedent’s RMD for the year of death to the extent the decedent did not distribute it. Further, there are no stated restrictions for using a distribution from an inherited IRA to cover either the RMD of the beneficiary or of the decedent. Finally, the decedent could clearly have done their own QCD prior to passing had they acted and it would have covered their annual RMD.
Conclusion appears to be that the beneficiary can use a QCD for the decedent’s RMD, and any inherited basis would be applied only after the pre tax dollars if basis was inherited.