RMD to Charity
Do the favorable rules for RMD’s sent directly to a charitable organization apply to RMD’s from Beneficiary IRA’s as well?
Do the favorable rules for RMD’s sent directly to a charitable organization apply to RMD’s from Beneficiary IRA’s as well?
Permalink Submitted by Peter Lingane on Wed, 2011-11-30 16:25
Yes. See Notice 2007-7.
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 701/2 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 701/2 before the distribution is made.
Permalink Submitted by Dennis Prout on Wed, 2011-11-30 16:35
It sounds like the charitable distribution is only available if the beneficiary is over age 70-1/2. Our client (the beneficiary) is age 55. Can she have the RMD sent directly to the charity?
Permalink Submitted by Peter Lingane on Wed, 2011-11-30 17:07
The RMD could be sent directly to a charity. However, the distribution would not be a qualified charitable contribution because the beneficiary is not aged 70.5 at the time of the distribution. The RMD (less any recovery of basis) would be taxable income and would increase AGI. The taxable portion of the distribution would be deductible on Schedule A according to the usual rules.
Permalink Submitted by Dennis Prout on Wed, 2011-11-30 18:06
Perfect. Thanks peter!