Plan rollover to IRA to charitable distribution

[ombskid]

Business owner age 71 has 2 million in profit sharing plan. He thought the charitable giving 100k was allowed from the plan. Everything I read says it must be from a traditional or roth IRA.

Do ya suppose he could roll 100k into an IRA then make a 100k charitable distribution from the brand new IRA.

[jevd]

I believe it can be done but be careful. He probably needs to satisfy his RMD first as the first distribution of any kind is deemed to be an RMD not allowed to be rolled over. After the RMD is satisfied, then do the rollover to the IRA. Also be sure the check from the IRA is made payable directly to the " Qualified Charity" >

[ombskid]

I believe it can be done but be careful. He probably needs to satisfy his RMD first as the first distribution of any kind is deemed to be an RMD not allowed to be rolled over. After the RMD is satisfied, then do the rollover to the IRA. Also be sure the check from the IRA is made payable directly to the " Qualified Charity" >

I wasn't aware that the first $$ to come out of a plan was deemed to be the rmd. Do you think that would be the case even if he has been taking for several years - a fairly consistent monthly distribution?

[jevd]

I believe it can be done but be careful. He probably needs to satisfy his RMD first as the first distribution of any kind is deemed to be an RMD not allowed to be rolled over. After the RMD is satisfied, then do the rollover to the IRA. Also be sure the check from the IRA is made payable directly to the " Qualified Charity" >

I wasn't aware that the first $$ to come out of a plan was deemed to be the rmd. Do you think that would be the case even if he has been taking for several years - a fairly consistent monthly distribution?

Yes. Regs under IRC 401(a)(9) state that First $ out are deemed RMD $. If at the end of the year all is satisfied, I don't know what the problem would be except that the letter of the law was not followed and it could invalidate part of the rollover. Timing is everything. It might be better to just take the RMD first and stop the monthly distributions for this year only. Then there is no question.

BTW There is pending legislation in both houses supported by all that will make Qual;ified Charitable Distributions permanent. When it will be passed is another matter.