Take some of IRA RMD, do QCD, then take any remaining IRA RMD/
Client has 2 IRAs and takes IRA RMDs from each. Normally we would recommend doing the QCD first but she is undecided about doing a QCD in 2022. Can she do the IRA RMD from one IRA then wait to do either a QCD or IRA RMD from the 2nd?
Permalink Submitted by David Mertz on Tue, 2022-07-26 18:46
Nothing wrong with that. QCD or not, the distributions are RMD until the RMD is satisfied, and due to the aggregation rules the RMD for any of the IRAs can be satisfied from another of the individual’s traditional IRAs (although aggregation is not being done in this scenario). The only difference with a QCD is that it’s excludible from income.
Permalink Submitted by Dan Zaehring on Tue, 2022-07-26 18:49
The QCD can be done at any time. The timing issue is that the QCD can only apply to the RMD when taken first. If she takes part of her RMD first, then the QCD can only be applied toward the remaining RMD. If the QCD is larger than the remaining RMD it just increases the total amount of distributions. So it may not be the best tax planning, but is perfectly acceptable.