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charitable donations


DDB  BN

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1 hour ago, DDB BN said:

Can a charitable donation be made directly from an inherited IRA of a  non-spouse beneficiary?

No. Any traditional IRA owner or beneficiary who is at least 70½ years old can use the qualified charitable distribution (QCD) rule to exempt their required minimum distributions (RMDs) from taxation. The age limit here applies to the exact date on which the IRA owner turns age 70½. For example, if an IRA owner turns 70 on February 15, he or she cannot make a QCD until August 15.

Roth IRA owners are also allowed to use the QCD rule, although they will not see any benefit from doing so as their distributions are already tax-free.

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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2 hours ago, Larry Starr said:

No. Any traditional IRA owner or beneficiary who is at least 70½ years old can use the qualified charitable distribution (QCD) rule to exempt their required minimum distributions (RMDs) from taxation. The age limit here applies to the exact date on which the IRA owner turns age 70½. For example, if an IRA owner turns 70 on February 15, he or she cannot make a QCD until August 15.

Roth IRA owners are also allowed to use the QCD rule, although they will not see any benefit from doing so as their distributions are already tax-free.

Hi Larry,

I agree with your explanation, with one minor qualification. A nonspouse beneficiary can make a QCD from an inherited IRA, as long as the beneficiary that holds that IRA is at least age 70 1/2 on the day the QCD is made.

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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On 2/5/2020 at 6:52 PM, Appleby said:

Hi Larry,

I agree with your explanation, with one minor qualification. A nonspouse beneficiary can make a QCD from an inherited IRA, as long as the beneficiary that holds that IRA is at least age 70 1/2 on the day the QCD is made.

Agreed; QCDs can be made only from traditional IRAs and traditional inherited IRAs. If making a QCD from an inherited IRA, the client would still need to be age 70½ to qualify. Thanks for the clarification.

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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