What to do with RMD

[jw96722689]

Wondering what others who are forced to withdraw the RMD are doing to avoid the large income tax hit?  I am very fortunate that I don't need the RMD but law says I have to withdraw the money which is killing me at tax time.

Ken

[NOTHAPPENING]

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@jw96722689 wrote:

Wondering what others who are forced to withdraw the RMD are doing to avoid the large income tax hit?  I am very fortunate that I don't need the RMD but law says I have to withdraw the money which is killing me at tax time.

Ken

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One thing you can do is donate part or all of your RMD to charity or if you attend church, have the company that holds your  IRA (401-K) money make the charity (church) a donation.  This way you don't have to pay tax on the part of the RMD that went to charity.

I currently put the RMD (quarterly payment) into the same fund I took it out of insuring that no loss (or gain) comes from the market being low (or high) and use it when I choose to take the money out.

[Gorm50]

Am confused by your second paragraph.  How does that relate to the question?  As I understand it you invest the taxable distribution in the SAME FUND from which the DEFERRED was invested. 

Once taxable you NOT only report on the distribution as income but earnings thereon .  I would be sensitive as to when you withdrawal that taxable amount as to whether the gains enjoy long term treatment.   

[jw96722689]

Thanks for that info.

[sktn77a]

Yes, but just to clarify that recommendation, you will be giving all your RMD away (so as not to pay any taxes on it).  You can get 0% and pay no taxes or you can get ~70% after paying taxes.  If you want./need the money, just pay the taxes and keep the rest.  If you want to donate it to charity, by all means do so and you won't pay any tax on it.

[Gorm50]

Sense there is confusion here between taxable and deferred accounts. 

If you are seeking to avoid paying taxes on "taxable gains" from appreciated assets, one can donate directly that asset and avoid taxation on the GAIN.

In that IRAs enjoy NO gain consideration, it makes NO SENSE distributing from an IRA as it is ALL taxed at your ordinary taxable rate, ie no long vs short term gain consideration. 

Agree with your conclusion