QCD on IRA More withdrawals
Client has variable annuity with a lifetime income of approx. 20k per year. However, she only takes the RMD out for now.
- Since she does have up to 20k for lifetime income, if she wants to send 2k to a charity on the QCD form for 2024, is that acceptable even though she took her full RMD in Jan, 2024?
- And if she is allowed, she would not be taxed on the 2k, correct?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Fri, 2024-11-22 15:18
The general strategy calls for completing all QCDs before the RMD is completed, because the first dollars distributed are applied to the RMD. In her case the RMD was completed in January which will result in a later QCD not reducing her taxable RMD even though that QCD would not be taxable.
At this point late in the year she should postpone the QCD until 2025 (only 6 more weeks) and perhaps add it to her 2025 donation. This QCD amount will reduce taxes on the 2025 RMD as long as she completes the QCDs before completing her RMD.