QCD and Excess RMD Contirbutions
Can a QCD “EXCEED” the RMD and all of the contribution not be applied to income OR is only the RMD allowed for the actual QCD?
Example: Assume my RMD for 2017 is $1000.00 and I complete a QCD for $1500.00. does the entire $1500.00 get to be applied under the rule or is it split $1000.00 for the QCD and $500.00 Charged as INCOME….
Note: I understand the tax deductibility if the extra $500 is then charged as income…I am seeking an answer to the excess being allowed for the QCD.
Permalink Submitted by Alan - IRA critic on Tue, 2017-12-05 16:13
A QCD can exceed the RMD but cannot exceed 100k. A valid QCD is excluded from AGI, therefore neither the RMD or the additional QCD amount will be taxed. In your example, the 1500 QCD will not be taxed as you would show “QCD” next to line 15b of Form 1040, and not show that 1500 on 15b. Of course, you must be at least 70.5 to the day before qualifying for a QCD. Your example will likely save you tax dollars as compared with doing a QCD for just 1,000 and then donating 500 from other funds, even if you can itemize the 500.