Each week the Ed Slott team answers questions from financial advisors across the country. Sometimes we see a pattern in repeating questions, sometimes the questions are relatively basic, and sometimes they are real stumpers. We never know what the next phone call or email will bring. Recently, we’ve fielded a rash of inherited IRA inquiries. Here are a few:
A qualified charitable distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity income-tax free. If you are thinking this might be a good strategy for you, here are 4 QCD rules that may surprise you.
Question:
Ed,
My mother passed away in May 2019, and I inherited her IRA. She had not completed her RMD for 2019, so I did that. In 2020, I began my RMDs based on the Single Life Table for Inherited IRAs.
Since I inherited prior to January 1, 2020, does anything in the SECURE Act apply to my inherited IRA? Will I be able to continue the RMDs per the Table or will I need to make sure I empty it completely within 10 years of when I inherited it?
Thank you,
Dale
By Andy Ives, CFP®, AIF®IRA AnalystFollow Us on Twitter: @theslottreport Question: I have a 401(k) that I’d like to use a portion...
Qualified charitable distributions (QCDs) continue to gain popularity, and with that popularity comes more questions. Here are a dozen QCD facts that will keep you on the straight-and-narrow with your QCD transactions:
Question:
Hello,
I’m learning a lot from Ed Slott’s latest book, “The New Retirement Savings Time Bomb,” but I do have a question on 401(k) Roth IRA conversions. I’m recently retired with a company 401(k). I’m leaning towards keeping the 401(k) (rather than rolling it into my IRA). Is it possible to do an annual direct conversion (partial) from my 401(k) to my Roth IRA, keep the remaining funds in the 401(k), and repeat the process every year until reaching RMD age?
Thank you,
Question:
I am 66 years old and live on Social Security and other retirement income. Additionally, I have about a half million dollars in pre-tax 457(b) funds that I do not need for current expenses. Are these funds in the pre-tax retirement accounts eligible for Roth conversion?
Question:
Hello. Thanks in advance for fielding my question.
My mother died in 2021 in her 90's. She was using $100,000 of her traditional IRA RMD as a QCD. In order to fulfill her 2021 charitable commitments, I did a QCD after her death.
Because I am not 70 ½ yet, my CPA tells me I need to include the IRA withdrawal in my income and take a charitable deduction because the assets had already moved to my inherited IRA account.
Is this correct? Is there an exception I am missing here?
Thanks!
Less than two weeks into the new year seems like a good time to provide a few reminders and warnings when it comes to Qualified Charitable Distributions (QCDs). As a quick refresher, remember these QCD facts:
Only available to IRA (and inherited IRA) owners who are age 70½ and over.
Capped at $100,000 per person, per year. (For a married couple where each spouse has their own IRA, each spouse can contribute up to $100,000.)
In most states the legal age for alcohol consumption is 21. And you must actually be 21. When you hand your driver’s license to the bouncer and he shines a little flashlight on your date of birth, it is not good enough to say you will be turning 21 in a couple of months. Unless today is your 21st birthday or later, the bouncer will wave you away, denying access to the premises.
