SEP-IRA and QCD
Client is 71, self-employed and the only participant under the SEP. The client currently has two large SEP-IRA’s with two different custodians. SEP-IRA “A” has received a contribution for 2020 while SEP-IRA “B” does not receive contributions. Client may want to continue SEP-IRA contributions going forward, so SEP-IRA A would still be considered an active SEP. However the client would like to start making large charitable contributions as well.
Can I do a rollover of SEP-IRA B to a Traditional IRA to make QCD’s from in 2020 and beyond, while keeping SEP-IRA A as a SEP to continue to receive SEP contributions?
Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2020-11-12 21:49
Since SEP B is not an “on going SEP IRA”, a QCD can be made directly from that SEP IRA account. It is not necessary to transfer SEP B to a TIRA for QCD purposes, although that can also be done if you choose.