Qualified Charitable Distributions and inherited IRAs: TOday’s Slott Report Mailbag

Thursday, March 27, 2025

By Andy Ives, CFP®, AIF®
IRA Analyst

Question:

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.”

I wonder if you can clarify what the phrase, “send funds directly to charity” means? The reason I ask is because doing a QCD on my IRA custodian’s web site produces a check payable to:

Name of the charity
FBO my name
My address

The custodian mails the check to me, and I need to mail it to the charity. The IRA custodian apparently thinks that qualifies as “directly to the charity.”  I’m not sure. What do you think?

Sincerely,
– Jim

Answer:

Hi Jim,

That will work! Sending a check to you will still qualify as a QCD, as long as the check is made payable to the charity and not to you personally. Just be sure that you deliver it to the charity, so it can be processed by them before the December 31 QCD deadline to avoid tax issues.

Question:

I have a question about an inherited Roth IRA. If a person inherits a Roth IRA in 2023, do they have to take required minimum distributions (RMDs) during the 10-year payout period? My spouse’s mother died in 2023 at the age of 95. In 2024 my spouse decided to take an RMD because it was unclear if he needed to. We would prefer to allow the money to compound as long as possible, before taking any distributions.

Thanks,

Mitch

Answer:

Hi Mitch,

Good news! RMDs are not required during the ten-year period for Roth IRA beneficiaries using the 10-year rule. Your spouse does not need to take any distributions from the Roth IRA he inherited from his mother until the end of 2033. He can let the tax-free earnings continue to accumulate in the inherited account until then.

If you have technical questions you would like to have answered, be sure to submit them to [email protected], to be answered on an upcoming Slott Report Mailbag, published every Thursday.

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