QCD Question
Hello, are we able to confirm if an IRA BDA Trust registration would be eligible to make a QCD? Would it not be eligible because a trust is consider an entity and not a person?
Thank you.
Hello, are we able to confirm if an IRA BDA Trust registration would be eligible to make a QCD? Would it not be eligible because a trust is consider an entity and not a person?
Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2019-11-22 15:51
You are on the right track. The IRS did not directly address this question in Notice 2007-7 or the tax code, but 2007-7 does refer to distributions made to “an individual”, however it seems reasonably clear that a trust would not meet the age of beneficiary requirement because a trust does not have an age. The “look through” trust rules only apply for RMD purposes, so there is no indication that even if ALL trust beneficiaries were over 70.5, they would be treated as eligible individuals as a group for QCD purposes. And finally, most trusts can accumulate income (complex trust) which could pass to remainder beneficiaries after the other beneficiaries have passed.
Permalink Submitted by David Mertz on Fri, 2019-11-22 17:12
It seems that if the trust provisions allow the inherited IRA to be transferred out of the trust to an inherited IRA for the benefit of the beneficiary directly, the inherited IRA would then be maintained for the benefit of an individual who, if over age 70½, could make a QCD from the account.