Question:I am age 85, and my wife is age 75. If I die first and my wife inherits my IRA, are the required minimum distributions (RMDs) that my wife must take after my death calculated using her age or my age?
Hello,I have two IRA annuities with different insurance companies. One of my annuities is maturing and I would like to transfer it upon maturity to a different insurance company. Do I need to take my 2025 required minimum distribution (RMD) from the current insurance company prior to transferring the funds to a new insurance company offering a higher rate, or can I take it after the transfer?
The IRS has introduced a new code for the reporting of qualified charitable distributions (QCDs) by IRA custodians on Form 1099-R.How QCDs WorkQCDs first became available in 2006, and they were made permanent in 2015. The strategy has become increasingly popular among IRA owners who are charitably inclined. With a QCD, IRA owners or beneficiaries who are at least age 70½ make a tax-free donation to charity directly from their IRA. An important benefit of a QCD is that it can be used to satisfy a required minimum distribution (RMD).
In the article "Why You Should Take Your 2025 RMD Now," the following caught my eye ...“Or, maybe you are charitably inclined and looking to satisfy your RMD by doing a qualified charitable distribution (QCD). This will require the custodian to send funds directly to charity and the charity must cash the check.”
Question:Hi,In a recent blog post, you addressed the complicated rules for a 401(k) to Roth IRA rollover. I have a similar question as it relates to a pre-tax IRA conversion to a Roth IRA.
Tis the season for giving, and qualified charitable distributions (QCDs) are a popular way to donate to a favorite charity. However, rules must be followed. In a recent Slott Report entry (“QCD Timing,” December 4), I included the following closing line: “Some IRA accounts allow check-writing privileges. Checks written to a charity from a ‘checkbook IRA’ qualify as a valid QCD.
Year after year, this topic continues to bubble up. Confusion exists over when a QCD can be done in relation to the RMD. Qualified charitable distributions (QCDs) can offset all or a portion of an RMD (required minimum distribution). However, for whatever reason, the sequencing of these items (QCDs and RMDs) confounds people. Let’s set the record straight, starting with some QCD fundamentals:
Each year it is a Thanksgiving tradition here at the Slott Report to take a moment to give thanks for the rules that are helpful to retirement savers. There are many times when rules governing retirement accounts can seem illogical, confusing, and maybe even unfair. However, there are other rules that work well and give us the tools necessary to not only save for a secure retirement but maybe even get a few tax breaks along the way.
Hello Ed Slott Team,We have a client with an IRA who wants to do a qualified charitable distribution (QCD) to a charity. The charity also has an account with the same custodian of the IRA and has asked that the client simply journal assets from her IRA directly to the charity’s account.
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.
