DIstribution of RMD from Simple IRA and traditional IRA direct to charity

Submitted by Stanley Fogel on Wed, 2022-10-26 22:17

I have a client aged 72 who has a Simple IRA of 500k and an traditional IRA of 172K. She is still working in her company(which sponsors her Simple IRA), but has not yet drawn a salary for 2022(she will do that in the last quarter).
1-Since she is still working is she prohibited from withdrawing funds from her Simple IRA? or distributing the funds directly
to a charity? Can she transfer some funds to her traditional IRA to send funds to a charity?(about 30k)
2-IF she did not get a w-2 for 2022 can she withdraw from her Simple IRA?



Submitted by Alan - IRA critic on Wed, 2022-10-26 23:38

  • She cannot do a QCD from the SIMPLE IRA because her salary will define the SIMPLE as an “on going SIMPLE IRA, from which QCDs cannot be made. However, if she has participated in the SIMPLE at least 2 years, she can do a direct transfer from the SIMPLE IRA to a traditional IRA and execute the QCD from the traditional IRA. Both her IRAs are now in RMD distribution years, and because a distribution from either must be applied toward the total 2022 RMD, she should complete the QCD from the TIRA before completing her total RMD.
  • Since she has a TIRA balance well in excess of the intended QCD, why does she need to transfer funds into the TIRA to do the QCD? She could just complete the QCD from the TIRA, then take the rest of her RMD from either or both of the accounts. The RMD can be aggregated in any combination between the two.

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