QCD
I encountered a situation that somehow I’ve not come across re: the interaction of a QCD and a qualified annuity (held in an IRA)
What are the mechanics to take annuity income (currently annuitized) and use a portion of it to make a QCD? Would the client request the insurance company to send a check to the QCD eligible charity? What role (if any) does the “First Dollars Out Rule” play?
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2021-02-19 20:44
Annuitized IRAs are only aggregated for RMD purposes with other IRA accounts in the year the IRA annuity was annuitized. After that these accounts are generally considered to generate separate RMDs from each other with all annuity payments treated as RMDs for the annuity. Nonetheless, It is probably unlikely an insurance company would cooperate with intercepting payouts to make them payable to a charity, but if they did it would probably be wise to get these checks distributed before completing the RMD for other non annuity IRA accounts. It would not matter which monthly annuity payment was issued as a QCD if the annuity IRA is the only IRA account, since even the December payment is an RMD.