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huilam1942
Level 1

Use of charitable donation in excess of IRA RMD

I donated to a charity directly from my IRA which is in excess of the IRA RMD.  I also had a RMD from my 401K.  Can I use the excess from my IRA donation to offset the tax for my 410K rmd?

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rjs
Level 15
Level 15

Use of charitable donation in excess of IRA RMD

A withdrawal from your IRA is taxable income. As far as the income tax is concerned, it doesn't matter whether the withdrawal is less than, equal to, or more than the RMD. The entire withdrawal is taxable. A withdrawal to satisfy the RMD is not taxed any differently from a withdrawal that is not part of the RMD. The RMD merely sets a minimum amount that you must withdraw. It does not affect how the withdrawal is taxed. Taking the withdrawal as a Qualified Charitable Distribution offsets the tax on the withdrawal itself, by excluding the amount of the contribution from your taxable income. You cannot use it to offset any other income. You do not have an "excess" donation or an "excess" withdrawal from the IRA. The amount of the withdrawal and donation is whatever it is, and it is all treated the same. It doesn't matter whether it's more than the minimum amount you were required to withdraw.

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1 Reply
rjs
Level 15
Level 15

Use of charitable donation in excess of IRA RMD

A withdrawal from your IRA is taxable income. As far as the income tax is concerned, it doesn't matter whether the withdrawal is less than, equal to, or more than the RMD. The entire withdrawal is taxable. A withdrawal to satisfy the RMD is not taxed any differently from a withdrawal that is not part of the RMD. The RMD merely sets a minimum amount that you must withdraw. It does not affect how the withdrawal is taxed. Taking the withdrawal as a Qualified Charitable Distribution offsets the tax on the withdrawal itself, by excluding the amount of the contribution from your taxable income. You cannot use it to offset any other income. You do not have an "excess" donation or an "excess" withdrawal from the IRA. The amount of the withdrawal and donation is whatever it is, and it is all treated the same. It doesn't matter whether it's more than the minimum amount you were required to withdraw.

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