Qualified Charitable Distribution from an inherited IRA

[rsteve]

Unlike my traditional IRA , Turbo Tax does not ask if any of my spouse's inherited IRA RMD was a QCD.  It is treated as taxable income. The interview also thinks my spouse is 701/2 (confirmed that Turbo Tax has the correct birth date). I confirmed the 1099-R info is correct in the program. Help

[macuser_22]

What code is in the 1099-R box 7?

Is the IRA/SEP/SIMPLE box checked?

[rsteve]

The 1099-R code is "4" in box 7 and the "IRA/SEP/SIMPLE" box is marked.

[macuser_22]

Was the owner of the IRA (the deceased person) born before July 1, 1947?

I do not believe that a QCD can be made from an inherited IRA if the owner of that IRA would have been prohibited from doing so if still alive because the age requirement has not been met even though the benificuary is over 70 1/2.

[ @dmertz  - is that correct]

[dmertz]

An individual is permitted to make a QCD from the inherited IRA only if that individual for whom the IRA is maintained, your spouse as beneficiary in this case, is age 70½ or over.  The age of the decedent does not matter with respect to this.

Since your spouse has not reached age 70½ or over in 2019, 2019 TurboTax will not offer to treat the distribution as a QCD (because it does not qualify as a QCD).  You'll have to claim the charitable contribution as an itemized deduction on Schedule A instead.

[dmertz]

I reworded my reply; I misread the original question as indicating that your spouse was the decedent.

[rsteve]

thanks for the reply. I'll have to a little research. I thought since my spouse is required to take a RMD starting the year after the death of the original IRA owner(no matter the age of the person inheriting the IRA or the decease); then we also could could make a Qualified Charitable Distribution.

[macuser_22]

Having to take a RMD form an inherited IRA and being able to make a QCD have separate requirements.    The beneficiary of an inherited IRA can be required to take RMD's reguardless if the beneficiaries age, but QCD's cannot be made until age 70 1/2.

I also misread your original question - I read it that you checked your spouses age to confirm that she was over 70 1/2.  If she is not, then she will not get the QCD question,

[dmertz · Accepted solution]

Whether or not the distribution is an RMD is not a factor in determining whether or not a distribution qualifies as a QCD.  The requirements to be a QCD are:

• the distribution is from the pre-tax money in the IRA,
• the one for whom the IRA is maintained is age 70½ or over,
• the distribution is sent directly to the charity from the IRA,
• the charitable contribution would otherwise qualify to be reported on Schedule A,
• the QCD limit of $100,000 per year is not exceeded, and
• with the changes in the tax code in the SECURE Act, the individual must subtract out the amount of deductible traditional IRA contributions made after age 70½ to their own IRA.  (This particular requirement get's a bit weird when the QCD is being made from an inherited IRA, but does not apply in this case.)

§ 408(d)(8)(B)(ii)

 which is made on or after the date that the individual for whose benefit the plan is maintained has attained age 70½

https://www.law.cornell.edu/uscode/text/26/408