charitablecontribution from IRA/401k

Submitted by [email protected] on Sat, 2016-08-06 14:05

I am 74 years old and I have no ira accounts. All my retirement money is in my 401k.
I want to make a qualified charitable contribution with my required minimum distribution> I know I cannot make it from my 401k account. Can I do a rollover to a IRA account and then make my 2016 qualified charitable contribution from that IRA that I just opened up?

Would I have to rollover all of my 401k to avoid the required minimum distribution for 2016?

Do I still have to do a required minimum distribution for 2016?



Submitted by Alan - IRA critic on Sat, 2016-08-06 17:00

  • Yes, you can do a direct rollover to an IRA however you will not benefit tax wise from making a QCD from the IRA account until the following calendar year. Before the direct rollover to an IRA is done the plan must distribute your 401k RMD to you. The IRA will not have an RMD for that year because there was no IRA balance at the end of the prior year. But there will be an IRA balance at the end of the rollover year, so you could use a QCD to offset all or part of your IRA RMD the following year.
  • If you did a partial direct rollover to an IRA, it may not be enough to produce a large enough IRA RMD for the QCD amount you wish to donate. Your 401k may or may not offer partial rollovers. Note that your IRA QCD should generally be done first each year because your first distribution is deemed to apply to your RMD. So if you took your full IRA RMD and did the QCD afterwards, the QCD would be tax free but would not offset any of your RMD and you would still owe taxes on your RMD.
  • You probably know the benefits of a QCD compared to a normal donation where you have to itemize and even if you do itemize your AGI is not reduced as it is by a QCD donation..

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