Required Minimum Distribution
If a person makes an irrevocable beneficiary designation of an IRA to a qualified charity, is he/she then required to count that IRA in the total to determine the RMD?
Thank You
If a person makes an irrevocable beneficiary designation of an IRA to a qualified charity, is he/she then required to count that IRA in the total to determine the RMD?
Thank You
Permalink Submitted by Alan Spross on Thu, 2007-10-11 22:41
Yes. RMD rules apply regardless of the beneficiary designation.
However, if the RMD owner makes a qualified charitable contribution directly to a qualified charity while living, that contribution is not reported in income and still is credited against the RMD requirement. The qualified charitable contribution provision expires 12/31/07 under current tax law.
Permalink Submitted by Robert E Burk on Thu, 2007-10-11 22:45
SO on 12-31-07 the qualified charitable contribution expires, what if one wanted to give the RMD on 01-01-08?
Permalink Submitted by Alan Spross on Fri, 2007-10-12 02:05
Charitable interests are lobbying Congress to extend the QCD for 2008 and beyond. However, if the provision is allowed to expire on 12/31/07, taxpayers with RMDs would have to take their 2008 RMD, report the income and then donate the funds to an approved charity. Then, they might be able to itemize deductions including the charitable gift on Sch A.
Any direct transfer using a QCD is not eligible for deduction since the distribution was never included in income.
An IRA beneficiary can also make a QCD if they have reached age 70.5 on the date of transfer.
Based on your original post, I should also clarify that the QCD can be made to any eligible charity, it is not limited to a charitable beneficiary named on the IRA agreement.