IRS IRA Restrictions

The IRS does not allow gifts from IRA required minimum disbursements to donor advised funds. In order for an individual to receive the income tax deduction associated with this type of gift, he or she must give up full control of the funds once they are transferred to the charity. Because the donor can still “advise” where the funds end up when put into a donor advised fund, the IRS does not allow this kind of transfer. However, there are plenty of other opportunities for the charitable use of IRA distributions that the IRS does allow! Here are some options:

  • Make a gift directly to a nonprofit to support its ongoing work in the community. At the Community Foundation, many donors choose to transfer IRA distributions to our Operating Fund to support the workshops and training services we provide to local nonprofits.
  • Support a specific project or designated fund. Donors often choose to make a gift to a designated fund held at the Community Foundation or to one of our Community Impact Funds.

 

Let us know if you or your clients have questions about making a gift to a charity using their IRA RMD or if you would like more information about charitable options through the Community Foundation.  Please contact Elena for further details about this type of gift.