Will a gift to a charitable gift annuity by a beneficiary escape the 10-year depletion rule
I have a traditional IRA and my wife is the primary beneficiary. She has a traditional IRA and I am her primary beneficiary. In both cases, our daughter is the contingent beneficiary. Upon the death of both myself and my wife, our daughter will inherit the assets from our then combined IRAs. Question: When our daughter inherits the assets, can she immediately gift all or most of those assets to a charitable gift annuity in order to accomplish the following: Receive a lifetime annuity based on her age at the time of the gift which will then presumably obviate any 10-year drawdown requirement?
Permalink Submitted by Alan - IRA critic on Wed, 2023-10-18 15:58
Since the CGA is a subset of the QCD rules, she cannot purchase the CGA with her inherited IRA funds until she is 70.5. This is also a one time purchase with a current limit of 50k, and the limit will be inflation adjusted in the future. All income she receives each year thereafter will be taxable at ordinary income rates. She would receive these payments for life with no 10 year rule restriction. There is a question whether the 50k limit is too low to bother with.
Permalink Submitted by Michael Philipps on Thu, 2023-10-19 13:55
Thank you. That explains everything. You’re right. The 50k limit makes it useless.