Qualified Charitable Distribution in Year of Death?
An 80-year old client intended to make a QCD of $100,000 to fulfill his required distribution of approximately $98,000. He died in October and his living spouse is the intended beneficiary. Is the executor allowed to complete the QCD this calendar year so as to fulfill his required year-of-death RMD without destroying the ability of the IRA to pass to his wife per the beneficiary designation. I guess the safest route would be to distribute the RMD in cash to his spouse and then make a cash gift to the intended charity.
I cannot find anything in the PPA that addresses the issue of post-death QCDs.
Any suggestions would be appreciated.
Thanks
Permalink Submitted by Alan Spross on Thu, 2007-12-06 18:47
If the surviving spouse has reached age 70.5, the following Q&A pasted from IRS Notice 2007-7 should take care of the issue:
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Q-37. Is the exclusion for qualified charitable distributions available for
distributions from an IRA maintained for a beneficiary if the beneficiary has attained age
70½ before the distribution is made?
A-37. Yes. The exclusion from gross income for qualified charitable distributions
is available for distributions from an IRA maintained for the benefit of a beneficiary after
the death of the IRA owner if the beneficiary has attained age 70½ before the
distribution is made.
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Since the beneficiary is responsible for taking the RMD of the decedent to the extent not taken prior to passing, she could make the transfer and it would be credited against the RMD requirement. She could then roll the account over to her own IRA or assume ownership. The direct transfer would have tax benefits over taking a distribution and then itemizing the contribution, even if she can itemize.
I assume the executor is just handling this on behalf of the surviving spouse under a POA?