Beneficiary IRA and Qualified Charitable Distributions
Hello! I recently had a potential client come through my office that had received a Bene IRA a couple years ago. They had to take RMDs from this account. This year, they decided to do a QCD. Unfortunately these individuals were not 70 1/2. Therefore, from my understanding they were ineligible to take a QCD. Is that correct? Is there any scenario in which an individual with a Bene IRA may take a QCD?
Related to the tax situation. Please confirm. The individuals will have to pay tax on the QCD’ed amount. Although, could they still take the benefit of the donation on their Schedule A?
Thank you in advance for your help!
Permalink Submitted by Alan - IRA critic on Fri, 2024-06-07 16:50
You are correct. An IRA beneficiary can execute a QCD, but only after they have reached the age of 70.5.
In this case, the entire 1099R for the inherited IRA will have to be reported as taxable income and not as a QCD. However, if the client has enough itemized deductions including this donation to itemize, this donation can be included as a charitable contribution on Sch A.
Permalink Submitted by Abigail McNaney on Fri, 2024-06-07 18:32
Thank you!!