I had an IRA balance on 12/31/16. I turned 70 on 6/26. I rolled the IRA to my employer’s 401k in July, 2017 to avoid having to take a RMD as I’m still working. (The employer allows rollovers from IRAs.) Do I have to take a RMD on the 12/31/16 balance?
I have another IRA that I didn’t roll & it has enough assets to take the RMD from it and from the IRA I rolled to the 401k. I guess I can take all my RMD from this still existing IRA. Correct?
My total RMD from all IRAs is $12,826. I’d like to gift this to charity to take advantage of the gifting benefit related to RMDs. Do you see any problem with doing this? I really appreciate your responses.
You cannot do a QCD until you reach 70.5 to the day (12/26/2017). You also have to decide whether you are going to roll the dice with respect to the IRA rollover you already did, which technically includes the RMD for that particular account. That leaves only the RMD for the other account that you could donate as a QCD and eliminate taxation of the other account’s RMD. Because of the holidays and only 4 working days you would have to pre order the QCD distribution from the IRA custodian to take place on 12/26 to give you time to receive the check in the mail and get it to the charity by 12/31. It’s a very tight time squeeze.
Permalink Submitted by Alan - IRA critic on Tue, 2017-10-31 20:13
Yes, and you have already taken that RMD by taking a distribution that will be reported on Form 1099R. The problem is that you cannot roll over the RMD portion of this distribution without creating an excess contribution to the 401k plan. You probably know the amount of the RMD that will have to reported as taxable income on your 1040 on line 15b, but you also have to advise the 401k plan that this amount was your IRA RMD and must be returned to you to correct an excess contribution to the plan. All this is not that costly, but is a hassle to report on your tax return. This answer differs somewhat if you have another IRA account from which you took distributions.