Required Minimum Distributions and Qualified Charitable Distributions: Today’s Slott Report Mailbag

Thursday, April 11, 2024

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on X: @theslottreport

QUESTION:

Dear IRA Help,

My mother passed away in April of 2023 and no required minimum distribution (RMD) was taken. The entire IRA account was paid out to the charity that was the beneficiary. Was there a requirement to take the RMD?

Joe

ANSWER:

Joe,

Our condolences on the loss of your mother. Yes, she did have a year-of-death RMD, and the year-of-death RMD is the responsibility of the beneficiary. Since the beneficiary, in this case, was the charity, and since the charity received a full distribution of the IRA, then all is well. The 2023 year-of-death RMD was included in the lump sum distribution to the charity.

QUESTION:

Can qualified charitable distributions (QCDs) be taken from an inherited IRA? I have my own traditional IRA that I have been taking QCDs from. If I take the QCDs from my inherited IRA only, do I need to wait to take my RMD from the traditional IRA until after the QCDs have cleared from the inherited IRA?

ANSWER:

Inherited IRAs operate completely independently from a person’s own IRAs. Meaning, RMDs between the two cannot be aggregated. Distributions from one account have no impact on distributions from the other. As such, you do not need to wait for any transactions to clear from one account before transacting on the other. Assuming you meet all the normal QCD requirements (like being age 70 ½), then yes, QCDs can be done from your inherited IRA. As mentioned, the timing of these QCDs has no impact on the RMD requirements from your own IRA. The only overlap is that the total annual QCD limit is $105,000 for 2024, aggregated across all IRA accounts.

Post Views: 254

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.