When QCDs exceed your IRA RMD
If the total sum of QCDs exceeds the IRA RMD for the year, is the total of the QCDs able to bring down your AGI even further, or will it just apply to the RMD, and whatever exceeds the RMD is taxable?
If the total sum of QCDs exceeds the IRA RMD for the year, is the total of the QCDs able to bring down your AGI even further, or will it just apply to the RMD, and whatever exceeds the RMD is taxable?
Permalink Submitted by Alan - IRA critic on Sat, 2021-02-13 19:27
A QCD up to the amount of the RMD wlll offset the tax due on the RMD. To the extent the QCD exceeds the RMD amount, it will not be taxable but it also will not reduce the taxes in the current year. It will reduce the year end IRA value and therefore reduce future RMDs incrementally. For example, if the RMD was 8000 but QCDs were made for 10,000, you would report 10,000 on line 4a of Form 1040, 0 on 4b, and enter “QCD” next to 4b. You do not show the RMD amount.