MISSED RMDs AND USING QCDs TO SATISFY RMDs: TODAY’S SLOTT REPORT MAILBAG

Thursday, November 04, 2021

By Ian Berger, JD
IRA Analyst
Follow Us on Twitter: @theslottreport

Question:

Hello,

I have a question about the calculation for RMDs when they were missed for multiple years.  Is the RMD calculated on the actual balance or the balance it would have been if the RMDs had been taken?

Thank you,

Jill

Answer:

Hi Jill,

Good question!  The IRS says that you must use the actual prior year-end account balances. In other words, you can’t subtract the missed RMDs from those previous account balances.

Question:

In 2022, I have a $70,000 RMD requirement. I was planning on doing a QCD of $50,000, and a $20,000 distribution to account for the $70,000 requirement. Later in the year, I want to do a $50,000 Roth conversion.

Can I do the QCD and RMD distribution at the same time and then later in the year do the Roth? Does there need to be a time delay between the QCD (first), and then the RMD disbursement or can they be done at the exact same time

Answer:

Yes, you can do the QCD and RMD distribution at the same time and then later in the year do the Roth. However, to avoid any possible confusion, you may want to complete the QCD transaction before having the remaining RMD paid. With regard to the Roth conversion, there’s no reason you can’t do that later in the same year after the full RMD has been satisfied.

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