QCD from 403b
I have a client who has the majority of her qualified assets in a 403b. She wants to make a QCD that will satisfy her RMD from 403b plan which I know that she cannot do. My question is since her birthdate is 4/28/1947 and as of today she is not yet 70.5, can we do a direct rollover to a Traditional IRA without satisfying her RMD from the 403b and then take her RMD from the TIRA and satisfy it as a QCD.
Or, since this is within the year she turns 70.5, will she have to satisfy her RMD from the 403b and then do rollover to TIRA and then be eligible for QCD on full RMD next year instead?
Permalink Submitted by Alan - IRA critic on Fri, 2017-08-11 20:05
The latter is correct. Assuming she has retired from the 403b sponsor, the 403b RMD must be distributed before or at the time of the direct rollover and not included in the rollover. Therefore, there would only be an IRA RMD for 2017 if there was an IRA balance on 12/31/2016. She can still do an IRA QCD this year after reaching 70.5 and it will generally produce a tax savings compared to a donation from taxable assets and itemizing, but it will not offset taxable income from RMDs unless there was an IRA balance on 12/31/2016.
Permalink Submitted by Sam Hodges on Mon, 2017-08-14 13:16
Thanks for getting back to me.