Question regarding taking QCD as part of your RMD

Submitted by Frank Miyamura on Wed, 2016-12-21 02:09

If you have a $10,000 RMD, does it matter the sequencing of executing the QCD and remaining RMD. For example, if I take a RMD of $7,000 first and then execute QCD’s for the remaining $3,000. Does one or the other have to be done first before the other? Thanks for your help. It’s greatly appreciated.



Submitted by Alan - IRA critic on Wed, 2016-12-21 02:56

  • The rule is that the first distribution is applied to the RMD.
  • The order of execution depends on the relative QCD/RMD amounts. In your example, there is no problem doing this because the amount of your partial RMD distribution still leaves 3,000 which can be offset by your QCD. The taxable amount will be 7,000.
  •  If you had taken the 10,000 RMD first, then the QCD could not be used to offset any of the 10,000 taxable income, although you could still do the 3,000 QCD if you wanted to. Taxable amount would be 10,000.

 

Submitted by Frank Miyamura on Wed, 2016-12-21 03:46

Thank you, Alan. I was trying to help a friend and thought maybe I gave him some bad info. Your answer will help me sleep better tonight. Thanks again

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