qualified charitable distributions
one insurance company we work will send a rmd to a charity
but if the owner wants more to go to the charity that portion would
go directly to the owner in her name to get around this if we annuitize
her contract would the annual distribution still qualify for a qcd
Permalink Submitted by Alan - IRA critic on Fri, 2017-11-17 00:32
In the year an IRA is annuitized, for that first year only the RMD aggregation rules still apply because there was a year end account balance for the entire value. The first distributions are deemed to apply to the RMD, therefore any QCD should be completed first to be sure that the QCD will offset RMD dollars. In the following year the annuity payments satisfy the RMD for the annuity only, so the mechanics of the QCD will become very tricky in that second year. A QCD of course can be less than the RMD, equal to, or more than the RMD. Remember that for a QCD the check must be made out directly to the charity and can be mailed to the taxpayer for delivery, but the check cannot be made out to the taxpayer and qualify as a QCD. Timing is critical, so before next year starts or the contract is annuitized, the 2018 distribution, annuitization, and QCD amount timing needs to be pre planned. The risk of an error is not that the QCD would not count, but that it could not be fully applied to the RMD. That would make more of the RMD taxable depending on the details and amounts.
Permalink Submitted by Howchen Lau on Mon, 2017-11-20 18:10
regarding that the qcd could not be fully applied to the rmd you are talking if theira owner has more than one account that the annuitized annuity ira is only for thataccount and caanot be utilized to offset rmds from other accounts please clarifythanks