Donors with second thoughts on using IRA charitable rollover after taking RMD already?

Great question came to me today.

An age 70.5+ supporter heard that he could have used the IRA charitable rollover to fulfill his RMD (required minimum distribution) requirement. Problem was that he already took his RMD withdrawal for 2011.

Any way to undo the RMD withdrawal and make an IRA charitable rollover gift instead?

Sadly, the answer seems to be no.  I posted on this topic earlier ( in the year and nothing has changed.

There are rules about IRA rollovers that do allow individuals to redeposit funds back into an IRA (generally within 60 days of the withdrawal) but they seem to explicitly exclude the RMD portions of their withdrawals.

The lesson here is that promoting the IRA charitable rollover option early in the year was very important.  At this late juncture, it may be too late for donors to receive the full benefits of the law.  A good lesson for future re-enactments of the law, should it get reinstated at some point in the future.


  1. Wouldn’t a donation to a qualified charity still be tax-neutral (at least as far federatl income taxes are concerned) up to $100,000 per individual? While they would lose the benefit of rolling over unneeded RMDs without incurring federal income taxes, donors could still benefit from donating additional assets that are merely “sitting” in their traditional IRAs.

  2. Yes, you are correct EXCEPT that you can’t actually claim that withdrawing from an IRA (and taking the income tax) and then donating the funds to a charity (for the offsetting charitable deduction) is tax-neutral. It depends on the donor’s tax situation and that is the challenge of trying to push donors to give from their IRAs without the IRA rollover. It is just complex enough that very few seem to do it. The IRA rollover simplifies it and throws in the RMD bonus. So, if your donor is willing to consider it, yes, they should be able to withdraw from the IRA and gift the funds with little or no tax consequence.

  3. Too simplistic and generic answer for what is a very individualized calculation. As soon as the IRA withdrawal is done, the donor realizes a taxable event based on their tax bracket. If the donor is able to itemize on his/her tax return they will be able to take advantage of a charitable deduction credit which typically will not match the tax free benefit of the IRA charitable rollover. If they can not itemize, they will not see any benefit tax wise from their gift which is not true if they gift via the IRA Rollover. The strength of the donor’s intent and commitment to the charity may over ride any concern about taxes, although it never hurts as the icing on the cake.

    1. I agree that my response was overly simplistic. The challenge is that if your donor is interested, he needs to sit down with his CPA and see the consequences. It is complex enough that I would not regularly promote at all! I did work with one donor who did seek counsel of his CPA and eventually withdrew $1 million from his IRA but that was the only time I saw it happen successfully in 15+ years of gift planning.

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