Susan S. Posted August 22, 2017 Share Posted August 22, 2017 A 401(k) participant wants to treat her RMD for the year as a qualified charitable distribution. She is eligible for an in-service distribution, so since these rules apply only to IRA's we could transfer her money to an IRA first and she could make the charitable distribution from there. However, isn't the RMD required before the rollover to the IRA? Is there any way around this hiccup? Link to comment Share on other sites More sharing options...
Bird Posted August 23, 2017 Share Posted August 23, 2017 I don't see a way around it. But is she sure it matters? That is, does it actually make any difference, tax-wise, if she takes a taxable distribution and then makes a tax-deductible charitable contribution, vs. doing a qualified charitable distribution? If she's not itemizing deductions it would make a difference, and if, at the high end, exemptions are being phased out, it can make a difference, otherwise it is usually the same net result. Ed Snyder Link to comment Share on other sites More sharing options...
CuseFan Posted August 23, 2017 Share Posted August 23, 2017 If it's an "in-service" distribution and RMD then I assume it's an owner, which would mean the high income phase out for charitable contribution deductions does come into play. As retirement plans must pay RMDs before rollover distributions, there is no way to circumvent. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
Flyboyjohn Posted August 23, 2017 Share Posted August 23, 2017 Having to run the distribution/charitable deduction through the 1040 can make a huge difference in taxability of Social Security and other tax attributes which function off Adjusted Gross Income. Link to comment Share on other sites More sharing options...
CuseFan Posted August 23, 2017 Share Posted August 23, 2017 Excellent point. Here's to continued Congressional gridlock that prohibits tax reform/simplification and keeps us all in business! Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
acm_acm Posted August 24, 2017 Share Posted August 24, 2017 And here I thought it was all the "reform" and "simplification" that kept us all in business. ;-) Link to comment Share on other sites More sharing options...
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