QCD Question

Submitted by Kevin Reardon on Tue, 2022-12-13 15:15

Hello,

I have a client that inherited a Fidelity 401(k) from a non-spouse. We consolidated the account from Fidelity into an ‘Inherited IRA QP’ account at Schwab. I know you are able to make QCDs from Inherited IRA accounts, but are you able to make QCDs from Inherited IRA QP accounts?

Thanks!



Submitted by Alan - IRA critic on Tue, 2022-12-13 15:38

  • If a “QP” inherited IRA flags the account as a direct rollover from a qualified plan that might be subject to the RMD rules of that plan instead of the usual inherited IRA RMD rules, that should not affect the client from executing a QCD providing client has reached 70.5 to the day. The problem is that any QCD done this year will not reduce the taxes on a 2022 RMD, which would have been distributed from the 401k, not the inherited IRA. However, distributions taken in 2023 and beyond  could be offset with QCDs in those years.
  • I am not sure what “QP” refers to at Schwab or it’s implications. The above statements are just a best guess.


Submitted by Kevin Reardon on Tue, 2022-12-13 15:46

Thanks, Alan!  The ‘QP’ stands for Qualified Plan.  I’m not sure if that changes anything.



Add new comment

Log in or register to post comments