QCD
Can I make a QCD any time in the year I turn 70 1/2 or do I actually have to be 70 1/2 in order to make a QCD?
So, if I turn 70 1/2 in December of 2016, can I make a QCD in May of 2016?
Thanks.
Can I make a QCD any time in the year I turn 70 1/2 or do I actually have to be 70 1/2 in order to make a QCD?
So, if I turn 70 1/2 in December of 2016, can I make a QCD in May of 2016?
Thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2016-04-22 18:47
You must have reached 70.5 to the day to do a QCD, so cannot do one prior to December. That also means that you cannot take any distribution before December if you want the QCD to apply to your RMD for the year because the first distribution is applied to the RMD.
Permalink Submitted by Robert Wright on Fri, 2016-04-22 20:49
Alan, If I do half my RMD before the day I turn 70.5 and half after the day I turn 70.5, will the second distribution still qualify as a QCD?
Permalink Submitted by Robert Wright on Fri, 2016-04-22 20:45
Thanks Alan.
Permalink Submitted by Alan - IRA critic on Fri, 2016-04-22 21:00
To clarify my last post, the order of distributions is important, but a QCD can be more or less than your RMD. For example, if your RMD is 10k and QCD is 5k, you can take 5k of your RMD anytime including early in the year. That still leaves 5k of your RMD left for the QCD amount you want. However, if your QCD was equal or larger in amount than your RMD, then you would have to make your QCD the first distribution of the year to have it offset your entire RMD.
Permalink Submitted by Robert Wright on Fri, 2016-04-22 21:20
That’s clear. Thanks.
Permalink Submitted by Scott Wolters on Tue, 2016-05-10 20:43
If I have already satisfied my RMD can I still do a QCD and have that distribution exlcuded from my income? Is the QCD limited to the RMD? If not, is there a QCD limit?
Permalink Submitted by Alan - IRA critic on Tue, 2016-05-10 23:07
The QCD limit is 100k. In your case, you can still do one if you have reached 70.5 and it will not be included in your income. However, since you took a distribution prior to the QCD it is that first distribution that is deemed to apply to your RMD amount and will be taxable. Next year, do your QCD first to make sure that it is applied to your RMD. Your QCD can be less than your RMD or more than your RMD.
Permalink Submitted by Michael Mattise on Thu, 2016-07-07 17:56
Alan,What I am trying to understand is that in order for your QCD to qualify towards your RMD, your QCD must be part or all of your first distribution of the year? And any QCDs after your first distribution will not count towards your RMD for the year? I am pretty sure that is what I have interpreted but I wanted to clarify before making the assumption. Thanks Alan.
Permalink Submitted by Alan - IRA critic on Thu, 2016-07-07 20:44
It depends on the amount of your RMD and the amount you intend to donate. If you take a non QCD distribution, it will count toward your RMD, leaving less of your RMD remaining that could be offset by a later QCD. What is your RMD amount, and what is your QCD amount?