QCD after RMD
If a client takes his RMD in January and then wants to make a QCD in December, how does the IRS know that the RMD was taken first since none of that information is not reported on the 1099?
Thank you!!
If a client takes his RMD in January and then wants to make a QCD in December, how does the IRS know that the RMD was taken first since none of that information is not reported on the 1099?
Thank you!!
Permalink Submitted by Alan - IRA critic on Wed, 2022-12-28 23:55
It wouldn’t matter because the client has will have withdrawn more than the RMD in total. That leaves the QCD as non taxable and 100% of the RMD taxable. If client executes a QCD now, if even possible at this late date, it will not be taxable, but will reduce the year end balance by the amount of the QCD, and future RMDs will be slightly smaller. It would make more sense for client to forget 2022 since the full RMD will be taxable, then perhaps double up on QCDs in January, which will reduce 2023 taxable RMD income by the amount he might have intended to reduce taxable income for both years.