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RMDs for Inherited IRAs

There is an incongruity in the IRS tax rules for Inherited IRAs. A non-spouse beneficiary of an inherited IRA for a decedent over 70 1/2 is required to take the Required Minimum Distribution (RMD) every year. This then gets reported in taxable income. If the full RMD is solely used to pay charities directly from the IRA, the RMD is then excluded from taxable income (called the QCD - Qualified Charitable Donation). However, if the beneficiary is under 70 1/2, then the QCD is not allowed and the donation would then be itemized on Schedule A. I do not see the reason for the age limit on the beneficiary since an RMD is required in this situation.

If you find yourself in this situation, please write to your congressman/woman in an effort to get the tax code modified, especially in light of the new tax law impact on the lower likelihood of itemizing.


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