Roth conversion vs QCD
If our plan is to use out TIRA’s as the vehicle for giving (all dollars) to charities, would there be any reason (benefit) in converting even one dollar to Roth? No heirs to leave it to.
For the same cost to you you can either:(1) pay some tax to the IRS to do a Roth converstion, then give the (reduced by tax) smaller amount of proceeds to the charity that will keep it all; or(2) not convert and give the whole thing (a larger amount) of your TIRA to the charity that will keep it all anyway since it pays no tax.So, in no heirs and no own need for the funds situation, the conversion would just take away some funds from the charity and give them to the Uncle Sam.
Permalink Submitted by Alan - IRA critic on Thu, 2021-07-15 16:38
I think you are referring to QCDs here rather than what the charity will inherit after the last spouse passes. If all RMDs can be reported as QCDs (max 100k each spouse each year), then no reason to convert at all.
Permalink Submitted by Blue_Sky on Thu, 2021-07-15 22:09
Yes thats the thinking. We would use QCD’s to offset RMD’s until we exhaust our respective TIRA’s. One wrinkle – We are retiring as of Jan 1, but SS wont start for 6 more years and RMD’s after that, so the “optimal window” to do any conversions will have closed by then. So this is a strategy/plan we have to fully commit to NOW since the optimal time to convert will have passed if we change our minds later, correct?