Can You Do A QCD From an Inherited IRA?
Inherited IRA beneficiary [b]under[/b] age 70.5 wants to do a QCD from an inherited IRA.
Is that allowed?
Inherited IRA beneficiary[b] over[/b] age 70.5 wants to do a QCD from an inherited IRA.
Is that allowed?
If allowed, How would this impact the $100,000 QCD limit per account?
Could each inherited IRA be used to contribute it’s own $100,000 per year?
Permalink Submitted by Alan Spross on Wed, 2011-05-11 19:06
1) No. But be at least 70.5 to the day.
2) Yes.
3) The limit is 100,000 per year per taxpayer. How they break it down between the owned and inherited IRA does not matter.
When selecting which IRA to use for the QCD, figure the RMD for each and have at least that amount contributed. The RMD between the two cannot be aggregated, so both accounts would have to have QCDs in order to cover the RMD from each. Another factor to consider that the inherited IRA has a larger % RMD than the owned one, so drawing it down first with QCDs is more tax efficient.
Permalink Submitted by Clyde Wolf on Wed, 2011-05-11 20:47
Alan-oniras,
Thank you for the information. Searching the IRS site I did not find the answers regarding inherited IRAs and QCDs.
Thanks.
Permalink Submitted by Alan Spross on Wed, 2011-05-11 22:50
It’s in Notice 2007-7, Q&A #37. You can see other QCD related issues also in that series of Questions:
http://benefitslink.com/IRS/notice2007-7.pdf