IRA Charitable Rollover
If someone holds an annuity within a Traditional IRA and they are older than 70 1/2 can a distribution from the annuity portion within the IRA be used for the QCD?
That would be difficult because there are multiple issues here, so where a cite is available they are separate and disbursed between different IRS Regs. On top of that the IRS never adapted the annuity RMD Regs to IRA accounts which can be aggregated. The QCD provisions do not mention annuities, so there is no reason that a QCD check could not be issued for an IRA annuity, other than insurance company reluctance. Your compounded variables here are RMD v pre RMD age, annutized IRA v non annuitized IRA, aggregation of RMDs between accounts v RMDs taken proportionally, and timing of QCDs such that it offsets RMD income as opposed to just being non taxable. But to your basic question, the answer is Yes, since the QCD provisions make no mention of excluding annuitized IRA distributions, therefore a QCD from an annuitized IRA is allowed. It’s the RMD end of things that causes the multiple variables and timing issues for the QCD to do the most good.
Permalink Submitted by Alan - IRA critic on Fri, 2021-03-05 19:20
Yes, if the check is made out directly to the charity. The insurance company probably does not offer that if the IRA has been annuitized. And is the annuity actually held in the same account as other IRA assets? There are RMD implications depending on whether the annuity has been annuitized, and if the person is RMD age per the Secure Act.
Permalink Submitted by Mike Caldwell on Fri, 2021-03-05 23:38
Thanks Alan for your response. At this point I know the donor is of QCD age and trying to verify that the annuity is held within the IRA along with whether it has been annuitized yet. Do you have any links/articles that you could forward to me that would speak to the differnet scenarios regarding this situation. This would give me something to show him so we could see the options. THX