Question:
If an IRA owner is over age 70 ½, can they do a qualified charitable distribution (QCD) even if their spouse makes a deductible traditional IRA contribution?
Mark
Answer:
Hi Mark,
There are some complicated rules that count deductible IRA contributions made after age 70 ½ against QCDs. However, these rules apply on a per person basis. What a spouse does is not considered. Your spouse can go ahead and make a deductible traditional IRA contribution. It will not affect your QCD.
Question:
In December of 2023 I requested a transfer of my IRA funds to a new custodian. The old custodian sent a check as a direct transfer to the new custodian, but as of 12/31 the check was “in the mail.” For RMD calculations, do I just forget these “in-the-mail dollars” (as they will be accounted for next year), or do I add the value of the outstanding check to the 12/31/2023 balance to calculate my 2024 RMD from my IRA with the new custodian?
Thanks,
Ryan
Answer:
Hi Ryan,
The RMD rules do require you to adjust the 12-31 prior-year balance used to calculate RMDs for any outstanding rollovers or transfers. In your case, you would need to add the amount of the outstanding transfer into your 12-31-23 balance when calculating your 2024 RMD.
Roth IRA conversions remain as popular as ever. However, based on some recent questions we’ve received, it is apparent that folks don’t fully understand all the nuances of this transaction. Here are some of the basic concepts and items of consideration:
The get-out-of-jail card that has allowed many IRA and plan beneficiaries to forego annual required minimum distributions (RMDs) is about to expire.Here’s some background:
Question:For a non-spousal inherited roth IRA account, there seems to be contradictory advice on different websites about when to take distributions. Some say there are annual required minimum distributions (RMDs) within the 10 years; others say you can wait until the 10th year for a lump sum. If you can wait and don't need the money, wouldn't it be wiser to wait until the last year since the money compounds tax free and the final lump sum distribution would also be tax-free?
There is some good news for retirement savers! The IRS has released the cost-of-living adjustments (COLAs) for retirement accounts for 2025, and many of the dollar limit restrictions on retirement accounts will increase next year. In addition, new rules from the SECURE 2.0 Act also will bring more savings opportunities.
Yes, you read that title correctly. This rule was confirmed in the 2024 final SECURE Act regulations, released this past July. If a person has multiple IRAs, even if they are held at different custodians, the total aggregated IRA required minimum distribution (RMD) must be withdrawn before any Roth IRA conversion (or 60-day rollover) can be completed.
QUESTION:Hello,I’m working with a retired client who has a sizable IRA. He set up a trust and named it as the beneficiary of the IRA, assuming that the trust would reduce or eliminate the income tax liability. Is this the case? Also, does a trust circumvent the 10-year rule?Thanks!
Don’t forget to turn your clocks back this weekend!With that reminder comes another: pay attention to the Roth IRA distribution clocks. The key point to remember is that there are two different clocks, each used for a different purpose.
The year 2024 has flown by and the holidays season will soon be upon us. That means time is running out on year-end IRA deadlines. You will want to be sure to get the following three IRA-related tasks done sooner rather than later to avoid penalties and missed opportunities:
Question:I disclaimed one of my spouse's IRAs and it went to our two adult children. They are withdrawing RMDs from this account as well as contributing to their own Roth and IRA accounts. Are there any rules regarding whether the inherited required minimum distribution (RMD) must be taken prior to contributing to your own account?Jeanne
