combined spousal QCD’s

Submitted by Richard Irwin on Tue, 2019-01-29 16:36

Do I understand correctly from the last Advisor newsletter, that each spouse is entitled to make a $100,000 QCD? In other words if one spouse has a traditional IRA but the other spouse only has a Roth IRA and doe not have a traditional IRA, they as a couple could theoretically make up to $200,000 QCD’s as long as the complied with the other requirements as to timing etc?.



Submitted by David Mertz on Tue, 2019-01-29 17:14

  • Each spouse can make QCDs up to $100,000 annually from each spouse’s own IRAs.
  • QCDs can only be made from funds in the IRA that would otherwise be taxable.  Because of that it’s extremely unlikely that any distribution to charity from a Roth IRA would qualify as a QCD, let alone $100,000 of distributions from a Roth IRA.  To make a $100,000 QCD from a Roth IRA it would have to be less than 5 years since the beginning of the year for which the individual first made a Roth IRA contribution and the Roth IRA would have to contain at least $100,000 attributable to earnings.  The only plausible way I can see of getting $100,000 of earnings in a Roth IRA in less than 5 years is if maximum Roth contributions were made to a Roth 401(k), the Roth 401(k) was rolled over to a Roth IRA before becoming qualified, and the investments grew at a rate of 20% or more every year.
  • If the distribution from the IRA to charity does not qualify as a QCD due to being nontaxable, it can be claimed as charitable deduction on Schedule A.

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