Inherited IRA and QCD Age of Beneficiary

Home Fairmark Forum Retirement Savings and Benefits Inherited IRA and QCD Age of Beneficiary

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This topic contains 5 replies, has 4 voices, and was last updated by  kaneohe 4 months, 2 weeks ago.

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  • #3282

    figsys
    Participant

    My spouse inherited an IRA from a parent who in turn inherited it from another family member. She is currently required to take RMD based on her life expectancy. She would like to make a QCD (Qualified Charitable Deduction). She is not yet 70 1/2 (the minimum age required for an QCD according to IRS). Is this correct – there is no (younger) age exception for an inherited IRA where the beneficiary is required to make a RMD?
    Thanks in advance.

    #3283

    dienerte
    Participant

    My understanding of IRS Publication 590-B is the owner of the traditional IRA must have attained the age of 70.5 before a QCD is allowable. The age of the current owner of the IRA is the controlling factor and the fact she inherited the IRA from an older (70.5+) person has nothing to do with the matter and there is no exception.

    #3284

    Alan S.
    Participant

    Yes, that is correct. She can do a QCD from the inherited IRA, but not until she herself reaches 70.5. Hope she is calculating her beneficiary RMD correctly since there are several possible factors that come into play. The most basic is that she cannot use her own age, but must continue the RMD schedule of the parent and must reduce that divisor by 1.0 each year. The other question is whether the parent was using the correct divisors.

    #3285

    kaneohe
    Participant

    .” Hope she is calculating her beneficiary RMD correctly since there are several possible factors that come into play. The most basic is that she cannot use her own age, but must continue the RMD schedule of the parent and must reduce that divisor by 1.0 each year.”

    Alan……..I’m a bit confused on this one…….even checked in 590B.
    I know that the initial divisor is reduced by 1.0 each yr but I was
    under under the impression that the initial beneficiary divisor was determined by the beneficiary’s age (or maybe it’s the most beneficial of the beneficiary’s age or owner’s age……if beneficiary is older).

    #3286

    Alan S.
    Participant

    Kaneohe, yes there are several different possibilities as to what the correct initial beneficiary divisor would be, and rather than go into all of them I just mentioned that the 1.0 reduction that the parent was using should continue. There are factors that could affect what the parent’s correct initial divisor would have been. Note that the parent here was not the owner, and I assumed they were a designated beneficiary of the owner. You are correct that if the parent was older than the owner AND the owner passed on or after the RBD, the age of the owner would determine the parent’s initial divisor, to then be reduced by 1.0 each year by the successor beneficiary just as the parent would have done.

    • This reply was modified 4 months, 2 weeks ago by  Alan S..
    #3288

    kaneohe
    Participant

    Thanks, Alan. I missed the part that the parent was not the original owner.

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