QCD Limitations

[Lee B]

My understanding is that the use of QCDs is limited to IRAs.

All of my clients who have retirement plans have SIMPLE Plans.

I believe these plans are all SIMPLE 401 k s which I assume are not eligible for the use of QCDs?

I wonder if SIMPLE IRA Plans are eligible for the use of QCDs?

[jklcpa]

12 minutes ago, Lee B said:

My understanding is that the use of QCDs is limited to IRAs.

All of my clients who have retirement plans have SIMPLE Plans.

I believe these plans are all SIMPLE 401 k s which I assume are not eligible for the use of QCDs?

I wonder if SIMPLE IRA Plans are eligible for the use of QCDs?

No QCD from SEPs or SIMPLEs unless they are inactive.

Active plans are those that are maintained under an employer arrangement under which an employer contribution is made for the plan year ending with or within the IRA owner's taxable year in which charitable contribution would be made.

[Lee B]

4 minutes ago, jklcpa said:

No QCD from SEPs or SIMPLEs unless they are inactive.

Active plans are those that are maintained under an employer arrangement under which an employer contribution is made for the plan year ending with or within the IRA owner's taxable year in which charitable contribution would be made.

Interesting, I have a client with an active SIMPLE. The fiduciary for the plan is RBC whose local advisor is telling my client that she can take QCD s?

[kathyc2]

From Pub 590-B: 

"Qualified charitable distributions (QCDs). A QCD is generally a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions."

 

Just have them roll some of the SIMPLE money to a Traditional and make the contribution from there. 

[jklcpa]

See the QCD section in Pub 590-B.

Also, IRC sec 408(d)(8)(B) is the section and says this: In this link, you might have to scroll to get to the capital B https://www.law.cornell.edu/uscode/text/26/408

Quote

Qualified charitable distribution For purposes of this paragraph, the term “qualified charitable distribution” means any distribution from an individual retirement plan (other than a plan described in subsection (k) or (p))—

408 subsection (k) are SEPs, and 408)(p) are SIMPLEs.

 

[Lee B]

59 minutes ago, kathyc2 said:

 

 

Just have them roll some of the SIMPLE money to a Traditional and make the contribution from there. 

My client is the owner who is still working and making active contributions to her SIMPLE account so that won't work.

[kathyc2]

4 minutes ago, Lee B said:

My client is the owner who is still working and making active contributions to her SIMPLE account so that won't work.

That shouldn't matter as long as the SIMPLE has been in effect for 2 years.