QCD + RMD
T-IRA owner, 80, took his entire 2025 RMD in January
He now wants to “roll” the RMD back to his IRA (it’s within the 60-day window) – and transfer those same funds to a qualifying charity to receive the (tax-free) QCD benefit
My thought is this can’t be done due to the IRS’ “first dollar’s rule” which states the first dollars distributed from an IRA satisfy the RMD & RMDs can’t be rolled over. – Is this correct?
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2025-02-13 15:32
Yes, that is correct.
The simple rule of thumb is to complete your QCDs before (or at the same time) as your RMDs. If the QCD is done later, it will not reduce the taxes on the RMD, even though those post RMD QCDs will not be taxable.
This owner could still do QCDs now, but they would have no impact on 2025 RMD taxes. However, by reducing the IRA balance further, future RMDs would be smaller, and if there is any basis in the IRA, it would be more concentrated since QCDs come first from the pre tax balance.