401(k) in-service dist to IRA, then to charity in Jan 2013

[Guest kprhok]

Can an individual, age 74, take in in-service distribution from her 401(k) plan (plan allows)in January, 2013, via direct transfer to a new IRA, and then make a QCD to charity prior to Jan 31, 2013?

[Borsley]

I don't have your answer but will make one small comment. If allowed, money coming from a qualified plan (i.e. 401(k) would have to move via a rollover (direct or indirict), not a transfer.

Also, normally the following assets are NOT allowed to be rolled over from an employer qualified plan to an IRA:

* RMDs

* Hardship Distributions

* Corrective refunds/distributions (excess deferrals/contributions)

* Payments that are a part of a series of substantially equal periodic payments.

None of these are probably your situation (I assume he'd be using the distribution as part of meeting the retirement age for the plan), but thought I'd list just in case.

[Guest kprhok]

Yes, it would be a direct rollover to the IRA. Thanks for helping clarify.

[John Feldt ERPA CPC QPA]

If this is done, the RMD for the qualified plan for 12-31-2012 had to be made (assuming one was required). I think the extension for QCDs being used to count as an RMD was only for IRAs?

[John Feldt ERPA CPC QPA]

So the question becomes: What is significant? If no significant changes have occurred, you are okay to rely on the prior test result in this 3 year period. I think the IRS would be the final decision maker on what is significant. Is it really that hard to just test again?

If this is a small plan, it won't take much to be significant.