Retirement Giving
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Leaving an IRA to Charity: Why It's Often the Most Tax-Efficient Asset to Give at Death

Josh Rendler, CFP®

Creator of Motion Retirement

Updated 2026-10-12 · Tax year 2026 · Figures checked October 10, 2026 · How this is checked

Can I leave my IRA to charity, and is it a smart way to give?

Yes. You can name a charity on your IRA's beneficiary form. If you plan to leave money to both family and charity, a pre-tax IRA is often the most tax-efficient thing to give. By my reading, a public charity (a charity like a church, school or hospital that gets the best tax treatment for gifts) pays no income tax on it. Your heirs would pay income tax on every pre-tax dollar they take out.

  • By my reading, a public charity pays no income tax on an inherited IRA (an IRA you get from someone who died). Heirs pay income tax on every pre-tax dollar they take out. Stocks get a reset at death. It's a step-up in basis (the rule that usually resets an inherited investment's cost to its value at death; IRAs don't get it). IRAs don't get one.
  • If your estate goes partly to family and partly to charity, giving the IRA to charity often leaves more for everyone. The IRA's built-in income tax is never paid.
  • The beneficiary form, not your will, usually decides who gets an IRA. The backup names on that form decide what happens if someone dies before you.
  • A charity and people can share one IRA. Then it helps to pay the charity by September 30 of the year after death. Separate accounts set up in time can help too. By my reading, paying the charity by that date still removes the question.
  • Gifts to charity at death are deductible for federal estate tax. An IRA can also go to a giving fund at a charity. That's a donor-advised fund (a giving account at a charity that holds your gifts until you pick where they go).
Jump to a question

A pre-tax IRA is often the most tax-efficient thing to leave to charity. By my reading, a public charity owes no income tax on it. Your heirs would.

So if your plan includes a gift to charity, which account you use matters. The same dollar amount can cost your family very different amounts of tax.

This page is for retirees who plan to leave something to charity. It covers a traditional IRA, 401(k) or similar pre-tax account. To give from your IRA while you’re alive and 70½ or older, see qualified charitable distributions.

Why is a pre-tax IRA often the best asset to leave to charity?

Often, because a pre-tax IRA carries an income tax bill. A charity doesn’t have to pay it, and your heirs do.

Pre-tax IRA money gets no step-up when you die.1 Whoever inherits it pays income tax when they take it out.1 It’s taxed as ordinary income, no matter what the investments gained.2

By my reading, the tax code’s name for that is income in respect of a decedent (money owed to someone who died that was never taxed, like a regular IRA).

Most other assets are different. That means stocks, funds and real estate in a regular account. Their cost basis (what you paid for an investment, or after-tax money put in an IRA, used to figure what part is taxed) is what measures gain when your heirs sell.

When you die, your heirs’ cost for stock generally resets to its value on the day you die.3 If they sell within a year of your death, it still counts as held more than a year.3

So the growth from your lifetime usually isn’t taxed if your heirs sell soon after.

There’s one exception. Say someone gave you an asset that grew, within a year of your death. If it passes back to them or their spouse, there’s no reset.4

A charity is exempt from federal income tax.56 By my reading, IRA money it inherits isn’t taxable business income, so it owes no income tax on it.6

So a pre-tax dollar in your IRA is worth a full dollar to a charity. To your children, it’s worth only what’s left after income tax. A dollar in your brokerage account is worth about a dollar to either one.

Do charities pay taxes on an inherited IRA?

No, not a public charity. It keeps the full payout. The tax a family member would have owed never comes up.

A charity is exempt from federal income tax.56 By my reading, IRA money it inherits isn’t taxable business income, so it owes no income tax on it.6

A private foundation (a charity funded mostly by one person, family or company, not a public charity) is different.

Most private foundations, the non-operating kind, must pay out about 5% of their investment assets each year.7 No such rule applies to a donor-advised fund.7 A private foundation also pays a 1.39% tax on its net investment income each year.8

Whether that tax reaches an IRA payout is for the foundation to confirm.

Worked example: two ways to split the same estate

Worked example · tax year 2026One IRA and one brokerage account, split between children and charity
Assumptions
  • Hypothetical estate: a $500,000 traditional IRA (all pre-tax) and a $500,000 taxable brokerage account with a $200,000 basis.
  • Goal: half the estate's value to the children, half to charity.
  • Assume the children pay a 32% marginal federal rate on inherited IRA withdrawals, and that rate does not change as they withdraw.
  • Assume the children sell the brokerage assets at their date-of-death value, so the stepped-up basis leaves no gain.
  • No federal estate tax is due. State taxes are ignored.
  • This example is about what heirs and charities receive, not anyone's yearly taxable income, so the senior deduction doesn't enter.
Step Plan A: IRA to children, brokerage to charity Plan B: IRA to charity, brokerage to children
Children receive $500,000 IRA $500,000 brokerage
Children’s basis None (IRA has no step-up) $500,000 (stepped up from $200,000)
Children’s federal income tax $500,000 × 32% = $160,000 $0
Children’s after-tax inheritance $500,000 − $160,000 = $340,000 $500,000
Charity receives $500,000 brokerage $500,000 IRA
Charity’s tax $0 $0
Total after tax to family and charity $340,000 + $500,000 = $840,000 $500,000 + $500,000 = $1,000,000

The charity gets the same $500,000 in both plans. The children get $160,000 more under Plan B. The only change is which account goes to whom.

The $300,000 gain in the brokerage account isn’t taxed in either plan. The reset at death erases it, no matter who receives the account here. The one-year gift exception above doesn’t apply in this case. Cost generally resets to the value on the day you die.3. The IRA’s built-in tax is what decides it.

Which assets should go to charity, and which to family?

Usually, the assets that would cost your heirs the most income tax do the most good with a charity.

Asset Tax to your heirs Tax to a charity Often left to
Traditional IRA, 401(k), 403(b) (pre-tax) No step-up; heirs pay ordinary income tax as they take it out.12 None for a public charity. By my reading, the charity owes no income tax on it.65 A private foundation has yearly taxes of its own, above. Charity
Annuities with untaxed gains, U.S. savings bonds with untaxed interest Usually income tax on the untaxed part None to the charity. But see the savings bond rules below. Charity
Stocks, funds, real estate in a regular account Little or none if sold near the date-of-death value. Cost generally resets to the value on the day you die.3 None Family
Roth IRA None on qualified withdrawals. That takes a Roth the owner first funded at least five years earlier9 None Family
Cash None None Either

The annuity and savings bond row follows from the same rule as IRAs. The company that issued a contract can confirm how it’s taxed.

But those two don’t use an IRA-style form. A savings bond’s beneficiary line is for an individual, not a charity.10 If a coowner or beneficiary is registered on a bond, that person becomes its owner at your death.11 A bond in your name alone becomes part of your estate, so your will can direct it.11 Your will has to direct that gift for your estate to take an income tax deduction for the bond interest.12 Otherwise the estate can be taxed on that interest. For an annuity, the insurance company’s own beneficiary form decides whether you can name a charity.

One wrinkle on the IRA row. If you made nondeductible IRA contributions, that after-tax part stays with the IRA at your death.13 Your heirs file Form 8606 (the tax form that tracks money in an IRA you already paid tax on) to split each withdrawal into a taxed part and a tax-free part.13 So only the pre-tax part carries income tax. Those after-tax dollars are worth the same to your heirs as to a charity.

A Roth IRA is the opposite of a traditional IRA. The tax is already paid. Leaving a Roth to a charity, which pays no tax anyway, wastes that prepaid tax.

Can I name a charity as my IRA beneficiary?

Yes. You name a charity on the beneficiary form, just as you’d name a person. The form comes from your IRA custodian (the bank or brokerage that holds your IRA). The IRA usually passes under that form, not your will.

A short checklist for the form:

  • Use the charity’s full legal name and tax ID number (EIN). Many charities post both on their gift-planning page.
  • Check that the shares add up to 100%.
  • Name a backup. More on that below.
  • Tell the charity. It isn’t required, but it helps them find and claim the gift.
  • Do this for every account. Each IRA, 401(k) and 403(b) has its own form.

Can I name a charity on my 401(k) if I’m married?

Usually only if your spouse agrees in writing. Most 401(k)-type plans must pay your account to your spouse when you die. To name someone else, such as a charity, your spouse must sign a written consent.14 A plan official or a notary must witness it.14 The consent must also name the charity you pick, and say your spouse understands the effect.15 Switching to a different charity later needs a new consent. The one exception is a consent that lets you change the name without asking again.15 Some plans only treat a spouse this way after a year of marriage. Your plan’s own rules are worth checking.16

This federal rule doesn’t apply to IRAs. Some states have their own spouse rights, so the plan or your lawyer can confirm what applies to you.

Doesn’t my will decide who gets my IRA?

Usually not. An IRA or 401(k) goes to the people named on the account’s own form. A will usually doesn’t change that.

Take someone who gets the account under a will or state law. For the tax rules, they aren’t a “designated beneficiary.” They must be named under the plan.17

For a 401(k), the Supreme Court has held that the plan pays the person named in the plan papers. In that case, an ex-wife still named on the form got the account. That happened even though a divorce decree said she gave it up.18

IRAs aren’t covered by that federal law. Who gets an IRA depends on the IRA agreement and state law. In practice, the custodian pays the people on its form.

A mistake I see often is a careful will paired with forms nobody has looked at in decades.

Old forms can still name an ex-spouse, a parent who has died, or children but not a grandchild born later. So two checks are worth doing. Is the form correct, with names spelled right and shares adding to 100%? And does it still match what you want?

What is “per stirpes” on a beneficiary form?

“Per stirpes” is Latin for “by branch.” On a beneficiary form, it usually means a share passes down a family line. If a beneficiary dies before you, their share goes to their own children.

This isn’t a federal rule. The exact meaning comes from your custodian’s agreement and state law. The definitions section of your form is where to check.

Here’s how it usually plays out. Say you name your two children equally. One child dies before you, leaving two grandchildren.

Form says What usually happens to the deceased child’s half
Per stirpes chosen Goes to that child’s two children, a quarter each
Per stirpes not chosen Goes to the surviving child, who gets 100%

Neither result is wrong. It depends on what you want. Many people are surprised that the second result can be their form’s default. A grandchild can be left out without anyone meaning to.

What happens if my beneficiary dies before me?

Their share goes wherever your form and the custodian’s agreement say. That’s why backup names matter.

  • If you named a backup, the account usually goes to them only if no main beneficiary is alive. If another main beneficiary survives, their share usually goes to that person instead, unless your form says per stirpes.
  • If you didn’t, and no main beneficiary is alive, the IRA agreement’s default applies. Many agreements pay your estate. Your own agreement is the authority.

Turning down a share is called a disclaimer. Depending on your IRA agreement, a disclaimed share may pass to your backup. Five federal tax conditions apply:

  • It has to be in writing and delivered within 9 months of the death.19
  • It has to reach the right person by then. That’s usually the IRA custodian. The owner’s legal representative, such as the executor, also counts.19 Someone under 21 has until 9 months after turning 21.19
  • The refusal has to be final and unconditional.20 You can’t take it back later.
  • The person must not have accepted the money or any benefit from it.21 By my reading, a withdrawal from the inherited IRA would be accepting a benefit.
  • The share must pass on without the person directing where it goes.21

A disclaimer also has to be valid under your state’s law and your IRA agreement. Your lawyer can confirm both. Someone who disclaimed is also ignored in deciding the payout rules. The rules look at who is still a beneficiary on September 30 of the year after death.22

Paying your estate has two effects. First, the money may have to go through probate, the court process for settling an estate.

Second, an estate isn’t a person. So the account has no designated beneficiary for the payout rules.17 That changes the payout timeline:

  • Your required beginning date (the deadline for your first required IRA withdrawal) matters. If you die before it, the five-year rule applies. The account must be emptied by December 31 of the year with the fifth anniversary of your death.23
  • If you die on or after it, payouts are based on your own remaining life expectancy. That number is cut by one each year.23 The span can be longer or shorter than the 10 years an adult child would otherwise have. For deaths after 2019, most heirs named on the account must empty it by the end of the 10th year.242526

A charity can be a backup too. Some people name family first and a charity as backup. The charity gets the account only if the family members don’t survive you or turn the money down.

By my reading, a charity that stays a pure backup isn’t counted. A beneficiary has to be entitled to part of the account.27 If the charity does take a share, the same September 30 cleanup can matter. The custodian and your lawyer can confirm how your agreement treats a backup charity.

Can I name a charity for part of my IRA?

Yes. Most custodians let you split an IRA by percent. For example, 20% to a charity and 80% split among your children. The charity’s share is still tax-free to it. By my reading, the charity owes no income tax on it.65

Naming a charity as an IRA beneficiary means the account is treated as having no designated beneficiary, even with people named too.28 That changes if the charity is paid its full share by September 30 of the year after the death.28

That changes your children’s payout timeline. By my reading, the timeline then follows the no-designated-beneficiary rules. Those are faster if you die before your required beginning date, under the five-year rule.23 They can be slower if you die on or after that date. Payouts then follow your own life expectancy, cut by one each year.23 By my reading, either way it isn’t the 10 years they’d otherwise have.

There are two standard fixes:

  1. Pay the charity’s share out early. A beneficiary paid in full by that September 30 date is ignored.22 Your executor and the custodian have to act quickly.
  2. Split into separate accounts. The payout rules can then apply to each share on its own, if the split meets the rules.29 The split has to be in place by December 31 of the year after death.30 A split made later doesn’t get separate treatment. The yearly required amount is then figured on the whole account.30

By my reading, the IRS hasn’t settled the mixed charity-and-family case head-on. Paying the charity’s share by September 30 removes the question.

Your children’s exact timeline depends on a few things. It matters whether you die before or after your required beginning date. It also matters if an heir qualifies for special rules. That’s an eligible designated beneficiary (an heir, like a spouse, who may spread inherited IRA payouts over life. A minor child can only until age 21). A minor child of yours counts, but only until age 21.31 The custodian can confirm the timeline for a specific account.

What is the “ghost rule” for inherited IRAs?

It’s an informal name for one payout used when there’s no designated beneficiary. It applies when the owner died on or after the required beginning date. Payouts then follow the owner’s own remaining life expectancy. That number is cut by one each year.23

This happens when an IRA goes to an estate. It also happens when a shared charity-and-family account isn’t cleaned up in time. If the owner died before the required beginning date, a different rule applies. That’s the five-year rule, not the ghost rule.23

For CPAs and attorneysDetermination date, disclaimers and the no-designated-beneficiary payout

The beneficiaries counted are those designated under the plan as of the owner’s death, tested on September 30 of the year after death; a beneficiary who predeceased the owner, disclaimed, or was fully paid by then is disregarded, and no one can be added after death (Treas. Reg. § 1.401(a)(9)-4(c); Pub 590-B).3222 With no designated beneficiary, death before the RBD triggers the 5-year rule; death on or after the RBD uses the owner’s remaining single life expectancy, reduced by one each year (Pub 590-B).23

Does leaving an IRA to charity reduce estate tax?

Yes, for estates big enough to owe federal estate tax. An IRA left to charity comes out of the taxed estate.

Two kinds of charity trust come up in the rule below. A CRAT (a charity trust that pays you the same dollar amount every year) is one. A CRUT (a charity trust that pays you a set percent of its value, so payments go up and down) is the other.

Gifts to charity at death are deducted from the estate for federal estate tax, with no dollar limit.33 A gift of only what’s left after others are paid qualifies only through a CRAT, CRUT or pooled income fund.33

Most estates owe no federal estate tax. For them, the benefit is the income tax savings above.

Can I leave my IRA to a donor-advised fund?

It may be possible. Whether it works is up to your IRA firm and the fund’s sponsor.

A donor-advised fund is an account held by a charity, called a sponsor, under your name.34 Once you give, the sponsor controls the money, and you only advise on grants and investments.34 The sponsor can’t be a private foundation.35 So by my reading, a gift to a sponsor that is a public charity counts as one.35 A few kinds of sponsor are ruled out by name, and gifts to those aren’t deductible.36 Those are a veterans’ group, a fraternal society, a cemetery company, or certain supporting organizations.36 Your receipt from the sponsor must also say the sponsor has full legal control of what you gave, or there’s no deduction.36 On a grant to a person, even family, the sponsor would owe a 20% tax.37 So sponsors make grants to charities, not to people.37

The sponsor is a charity, so the gift isn’t taxed to it. By my reading, the charity owes no income tax on it.65. Your children may then be able to suggest grants over time. That works only if the sponsor lets you name them as successor advisors. The sponsor’s own rules decide.

The limit you may have heard about is for gifts while you’re alive. One kind of charity comes up in the rule below. A supporting organization (a charity set up to help one or more specific public charities) is set up to help one or more specific public charities. A qualified charitable distribution can’t go to a donor-advised fund. A public charity, not a donor-advised fund, supporting organization or most private foundations.3839. That rule doesn’t stop you from naming one on a beneficiary form. See donor-advised funds.

Can I leave an IRA to a charitable remainder trust?

Yes. A charitable remainder trust (a trust that pays you or people you name for life or a set term, then gives what is left to charity) is usually set up to pay you. You can also name one on your IRA, and then it pays your heirs. The charity gets what’s left.

A charitable remainder trust pays no income tax, so it can sell what you gave without tax at that moment.40 Business-type income inside it is taxed at 100%.40 That includes part of the income from an asset with a loan on it, like a mortgaged building.41 The trust can’t be undone, and it files Form 5227 every year.42

A CRAT pays a fixed amount each year, set at 5% to 50% of what went in.43 A CRUT pays a set 5% to 50% of the trust’s value, measured again each year.44 Either pays at least once a year.43 It can run for a set term of up to 20 years, or for the lives of the people paid.4345 Those people must be alive when the trust starts.45 The charity’s share must be worth at least 10% of what goes in.46

Payments from a charitable remainder trust are taxed in four layers.47 First comes ordinary income, then capital gain, then other income such as tax-free income, then a tax-free return of what went in.47

It’s a complex plan. It tends to fit people who really want to give. See charitable trusts.

Can a pension go to charity when I die?

It depends on the plan and the payout you chose. Your plan’s papers decide what, if anything, is paid at death and to whom. The plan’s administrator can confirm it before you count on a pension for a gift. The ideas on this page apply to IRAs and brokerage accounts.

Related video The REAL Value Of A Pension In Retirement (Nobody Will Tell You This) · pensions and what passes at death

Can I take money from my IRA tax-free to give to charity?

Yes, if you’re 70½ or older. A qualified charitable distribution, or QCD (money sent straight from your IRA to a charity at 70½ or older, not taxed as income, up to a yearly limit), sends money from your IRA straight to a charity. Left out of income before AGI (your total income minus a few set subtractions, the number many tax rules start from), so it can't also be deducted.4849. The money has to come from an eligible IRA. A traditional or inherited IRA, or a SEP or SIMPLE IRA with no employer contribution that year.5051. It has to go to an eligible charity that gives you nothing back. A public charity, not a donor-advised fund, supporting organization or most private foundations.3839. See eligibility.

The QCD limit is $111,00052 per IRA owner in 2026, up from $108,00052 in 2025.5253 It is adjusted for inflation, so it can rise in some years and stay the same in others.52 The limit covers all of your QCDs for the year together, not each IRA separately.54 On a joint return, each spouse has their own limit for the IRAs they own.53

Giving now and leaving the IRA at death both get pre-tax dollars to the charity without income tax. The yearly limit above applies only to giving while you’re alive. A gift left at death isn’t a qualified charitable distribution. So by my reading that limit has nothing to cap. See how to give straight from your IRA.

Can I give to charity from an inherited IRA?

Yes, if you’re 70½ or older. A beneficiary that age can make one from an inherited IRA. A traditional or inherited IRA, or a SEP or SIMPLE IRA with no employer contribution that year.5051. Only money that would otherwise be taxed, so not a qualified Roth withdrawal.5556. By my reading, a gift like this counts against that person’s own yearly limit. $111,000 per IRA owner in 2026 ($108,000 in 2025).525354. See giving from an inherited IRA.

How do I leave an IRA to my children?

You name them on the beneficiary form. They pay income tax on the pre-tax part as they take it out.13

For deaths after 2019, most heirs named on the account must empty it by the end of the 10th year.242526.

There’s no general way to hand children pre-tax IRA dollars tax-free. One narrow exception exists. A child who is 70½ or older can give from the inherited IRA as a qualified charitable distribution. Left out of income before AGI, so it can't also be deducted.4849. But that money goes to charity, not to them. Their brackets may be higher than yours. If so, Roth conversions during your life let you pay that tax at a lower rate.

If some of your estate goes to charity anyway, many people consider leaving the traditional IRA to charity. Roth or regular-account assets then go to the children.

Is it better to give money now or leave it as an inheritance?

It depends on what you value more. Giving now brings a tax benefit you can use now, a deduction or tax-free IRA gifts. You also see the gift’s effect.

Leaving an IRA to charity at death keeps the money there in case you need it. Many retirees do both. They give from the IRA each year from 70½, and name a charity on the IRA for what’s left.

Common mistakes

  • A cash gift to charity in the will, and the IRA to the children. That’s the same mistake as Plan A in the example. It usually costs the family income tax that didn’t have to be paid.
  • Naming a charity and people on one IRA without a plan. Without an early payout or separate accounts, the account may be treated as having no designated beneficiary.
  • Leaving the backup line blank. If no main beneficiary is alive, the account may go to your estate. An estate isn’t a designated beneficiary.17
  • Not knowing whether per stirpes is chosen. Without it, a deceased child’s share may go to their siblings, not their children.
  • Using an old or vague charity name. The legal name and EIN avoid mix-ups.
  • Assuming the will controls. For an IRA, the IRA agreement and state law decide. In practice the custodian pays the people on its form. For a 401(k), the plan papers control.18 So the form is worth a look whenever your plans or family change.

Sources (56)

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  1. Pre-tax retirement accounts are income in respect of a decedent: the beneficiary who receives the right to the money includes it in gross income when received, and IRD gets no basis step-up at death.

    • 26 U.S.C. § 691 (LII), § 691(a)(1)shall be included in the gross income, for the taxable year when received, of: Checked 2026-10-09.
    • 26 U.S.C. § 691 (LII), § 691(a)(1)(B)the person who, by reason of the death of the decedent, acquires the right to receive the amount Checked 2026-10-09.
    • 26 U.S.C. § 1014 (LII), § 1014(c)This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691. Checked 2026-10-09.

  2. Taxable distributions from a traditional IRA are taxed as ordinary income; capital gain treatment does not apply, regardless of what the investments inside the IRA gained.

    • IRS Publication 590-B (2025), Ch. 1, Are Distributions Taxable? — Ordinary incomeDistributions from traditional IRAs that you include in income are taxed as ordinary income. No special treatment. In figuring your tax, you can't use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Checked 2026-10-10.

  3. Heirs generally take a basis equal to fair market value at the date of death, and inherited property sold within a year is treated as held more than 1 year.

    • 26 U.S.C. § 1014 (LII), § 1014(a)(1)(1) the fair market value of the property at the date of the decedent’s death, Checked 2026-10-09.
    • 26 U.S.C. § 1223 (LII), § 1223(9)such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death, then such person shall be considered to have held such property for more than 1 year. Checked 2026-10-09.

  4. § 1014(e) denies the step-up for appreciated property the decedent received by gift within one year of death when it passes back to the donor or the donor's spouse.

    • 26 U.S.C. § 1014 (LII), § 1014(e)(1)appreciated property was acquired by the decedent by gift during the 1-year period ending on the date of the decedent’s death, and (B) such property is acquired from the decedent by (or passes from the decedent to) the donor of such property (or the spouse of such d Checked 2026-10-09.

  5. An organization described in § 501(c) (including a § 501(c)(3) charity) is exempt from federal income tax, so a charity that receives pre-tax IRA dollars generally pays no income tax on them.

    • 26 U.S.C. § 501 (LII), § 501(a)An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503. Checked 2026-10-09.

  6. A § 501(c)(3) charity is exempt from federal income tax, so a charity that receives an IRA as beneficiary owes no income tax on the distribution (inference: IRA proceeds are not unrelated business income).

    • 26 U.S.C. § 501 (LII), § 501(a)An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503. Checked 2026-10-09.

  7. A private (non-operating) foundation must pay out a distributable amount built on a minimum investment return of 5% of its non-charitable-use assets each year (§ 4942). No similar rule applies to a donor-advised fund.

    • 26 U.S.C. § 4942 (LII), § 4942(e)(1)the minimum investment return for any private foundation for any taxable year is 5 percent of the excess of— (A) the aggregate fair market value of all assets of the foundation other than those which are used (or held for use) directly in carrying out the foundation’s exempt purpo Checked 2026-10-10.

  8. A tax-exempt private foundation pays a 1.39% excise tax on its net investment income each year (§ 4940(a)).

    • 26 U.S.C. § 4940 (LII), § 4940(a)There is hereby imposed on each private foundation which is exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to 1.39 percent of the net investment income of such foundation for the taxable year. Checked 2026-10-10.

  9. A Roth IRA distribution to a beneficiary after the owner's death is a qualified (tax-free) distribution only if it is made after the 5-taxable-year period beginning with the first year a contribution was made to a Roth IRA for the owner.

    • 26 U.S.C. § 408A (LII), § 408A(d)(2)(B)shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA Checked 2026-10-10.
    • IRS Publication 590-B (2025), Ch. 2, What Are Qualified Distributions?It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit. Checked 2026-10-10.

  10. On a United States savings bond, only an individual may be designated as coowner or beneficiary, so a charity cannot be named on the bond's own registration.

  11. A savings bond registered with a surviving coowner or beneficiary passes to that person as sole and absolute owner at the owner's death; a bond registered in single ownership form becomes property of the decedent's estate.

  12. An estate gets an income tax deduction for gross income paid to charity only if the payment is made pursuant to the terms of the governing instrument, such as the will.

    • 26 U.S.C. § 642 (LII), § 642(c)(1)there shall be allowed as a deduction in computing its taxable income (in lieu of the deduction allowed by section 170(a), relating to deduction for charitable, etc., contributions and gifts) any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, paid for a purpose specified in section 170(c) Checked 2026-10-11.

  13. If a traditional IRA owner had basis from nondeductible contributions, that basis remains with the IRA after death, and the beneficiary files Form 8606 to figure the taxable and nontaxable parts of distributions.

    • IRS Publication 590-B, Ch. 1, Inherited IRAs — BasisIf you inherit a traditional IRA from a person who had basis in the IRA because of nondeductible contributions, that basis remains with the IRA. Checked 2026-10-11.
    • IRS Publication 590-B, Ch. 1, Inherited IRAs — BasisIf you take distributions from both an inherited IRA and your IRA, and each has basis, you must complete separate Forms 8606 to determine the taxable and nontaxable portions of those distributions. Checked 2026-10-11.

  14. A spouse's written consent to a non-spouse beneficiary must designate a beneficiary that may not be changed without further spousal consent, unless the consent expressly permits later designations without it, and the consent must acknowledge the effect of the election.

    • 26 U.S.C. § 417 (LII), § 417(a)(2)(A)(ii)–(iii)such election designates a beneficiary (or a form of benefits) which may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the participant without any requirement of further consent by the spouse), and (iii) the spouse's consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public Checked 2026-10-11.

  15. A plan may provide that the surviving-spouse death benefit is not paid unless the participant and spouse were married throughout the 1-year period ending on the earlier of the annuity starting date or the participant's death.

    • 26 U.S.C. § 401 (LII), § 401(a)(11)(D)merely because the plan provides that benefits will not be payable to the surviving spouse of the participant unless the participant and such spouse had been married throughout the 1-year period ending on the earlier of the participant’s annuity starting date or the date of the participant’s death. Checked 2026-10-10.

  16. For the required minimum distribution rules, a designated beneficiary is an individual designated under the plan (by the plan's default terms or the owner's affirmative election). Someone who receives the account under a will or state law is not a beneficiary designated under the plan unless the plan designation names them. A non-individual such as the estate is not a designated beneficiary.

    • 26 CFR § 1.401(a)(9)-4 (eCFR), § 1.401(a)(9)-4(a)(3)The fact that an employee's interest under the plan passes to a certain person under a will or otherwise under applicable State law does not make that person a beneficiary designated under the plan absent a designation under the plan. Checked 2026-10-10.
    • 26 CFR § 1.401(a)(9)-4 (eCFR), § 1.401(a)(9)-4(a)(4), (b)A beneficiary designated under the plan may be designated by a default election under the terms of the plan or, if the plan so provides, by an affirmative election of the employee (or the employee's surviving spouse). Checked 2026-10-10.
    • 26 CFR § 1.401(a)(9)-4 (eCFR), § 1.401(a)(9)-4(b)A person that is not an individual, such as the employee's estate, is not a designated beneficiary. Checked 2026-10-10.

  17. For an ERISA employer plan (such as a 401(k)), the plan administrator pays benefits to the beneficiary named under the plan documents. In Kennedy v. Plan Administrator for DuPont (2009), the Supreme Court held the administrator properly paid a former spouse who was still the named beneficiary, despite a divorce decree in which she had waived the benefits.

  18. A qualified disclaimer must be in writing and received by the transferor, the transferor's legal representative, or the holder of legal title no later than 9 months after the later of the day the transfer creating the interest is made or the day the person disclaiming turns 21.

    • 26 U.S.C. § 2518 (LII), § 2518(b)(2)such writing is received by the transferor of the interest, his legal representative, or the holder of the legal title to the property to which the interest relates not later than the date which is 9 months after the later of—(A) the day on which the transfer creating the interest in such person is made, or (B) the day on which such person attains age 21 Checked 2026-10-11.

  19. A qualified disclaimer must be an irrevocable and unqualified refusal to accept an interest in property.

    • 26 U.S.C. § 2518 (LII), § 2518(b), opening wordsFor purposes of subsection (a), the term 'qualified disclaimer' means an irrevocable and unqualified refusal by a person to accept an interest in property but only if— Checked 2026-10-11.
    • 26 U.S.C. § 2518 (LII), § 2518(b)(1)such refusal is in writing, Checked 2026-10-11.

  20. A qualified disclaimer also requires that the person has not accepted the interest or any of its benefits, and that as a result of the refusal the interest passes without any direction on the part of the person disclaiming.

    • 26 U.S.C. § 2518 (LII), § 2518(b)(3)such person has not accepted the interest or any of its benefits Checked 2026-10-11.
    • 26 U.S.C. § 2518 (LII), § 2518(b)(4)as a result of such refusal, the interest passes without any direction on the part of the person making the disclaimer and passes either—(A) to the spouse of the decedent, or (B) to a person other than the person making the disclaimer Checked 2026-10-11.

  21. A person who was a beneficiary at the owner's death but is no longer a beneficiary on September 30 of the year after death, because they disclaimed or received their entire benefit, is not taken into account in determining the designated beneficiary.

    • IRS Publication 590-B (2025), Ch. 1, Distributions After Owner's Death — Date the designated beneficiary is determinedAny person who was a beneficiary on the date of the owner's death, but isn't a beneficiary on September 30 of the calendar year following the calendar year of the owner's death (because, for example, the beneficiary disclaimed entitlement or received their entire benefit), won't be taken into account in determining the designated beneficiary. Checked 2026-10-10.

  22. If an IRA has no designated beneficiary (for example, the estate is the beneficiary): when the owner died before the required beginning date, the 5-year rule applies (the account must be emptied by December 31 of the year containing the fifth anniversary of death); when the owner died on or after the required beginning date, distributions use the owner's remaining life expectancy.

    • IRS Publication 590-B (2025), Ch. 1, Distributions After Owner's Death — Owner Died Before Required Beginning DateIf the owner’s beneficiary isn’t an individual (for example, if the beneficiary is the owner’s estate), the 5-year rule , discussed later, applies. Checked 2026-10-10.
    • IRS Publication 590-B (2025), Ch. 1, 5-year ruleThe 5-year rule requires the IRA beneficiaries who are not taking life expectancy payments to withdraw the entire balance of the IRA by December 31 of the year containing the fifth anniversary of the owner’s death. Checked 2026-10-10.
    • IRS Publication 590-B (2025), Ch. 1, Owner's life expectancyYou use the owner’s life expectancy to calculate required minimum distributions when the owner dies on or after the required beginning date and there is no designated beneficiary as of September 30 of the year following the year of the owner’s death. In this case, use the owner’s life expectancy for their age as of the owner’s birthday in the year of death and reduce it by 1 for each subsequent year. Checked 2026-10-10.

  23. For IRA owners who die after 2019, a designated beneficiary who is not an eligible designated beneficiary must empty the account by the end of the 10th year after death. Eligible designated beneficiaries are the surviving spouse, the owner's minor child, a disabled or chronically ill individual, or someone not more than 10 years younger than the owner. If the owner died before the required beginning date and the 10-year rule applies, no distribution is required before the 10th year; if the owner died on or after the required beginning date, the final regulations require annual distributions to continue until the account is fully distributed. Eligible designated beneficiaries generally use life-expectancy distributions; a minor child's 10-year period starts at majority.

    • IRS Publication 590-B (2025), What's New / Reminders, Modification of required distribution rules for designated beneficiariesAll distributions must be made by the end of the 10th year after death, except for distributions made to certain eligible designated beneficiaries. Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 1, IRA Beneficiaries, Eligible designated beneficiariesAn IRA beneficiary is an eligible designated beneficiary if the beneficiary is the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than 10 years younger than the IRA owner. Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 1, Payment under the 10-year ruleIf the IRA owner dies before the required beginning date and the 10-year rule applies, no distribution is required for any year before the 10th year. Checked 2026-10-09.
    • 26 CFR § 1.401(a)(9)-5 (LII), § 1.401(a)(9)-5(d)(1)(i)The requirement to take an annual distribution in accordance with the preceding sentence continues to apply for every distribution calendar year until the employee 's interest is fully distributed. Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 1, Individual designated beneficiariesThe terms of most IRAs require individual designated beneficiaries, who are eligible designated beneficiaries, to take required minimum distributions using the life expectancy rules Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 1, 10-year ruleupon the minor child beneficiary reaching the age of majority Checked 2026-10-09.

  24. A designated beneficiary who is not an eligible designated beneficiary must fully distribute an inherited IRA by the 10th anniversary of the owner's death.

    • IRS Publication 590-B (2025), IRA Beneficiaries, Individual designated beneficiariesIf the individual designated beneficiary is not an eligible designated beneficiary, the beneficiary is required to fully distribute the IRA by the 10th anniversary of the owner's death under the 10-year rule. Checked 2026-10-09.

  25. If the owner died on or after the required beginning date, a designated beneficiary takes yearly required distributions for years after the year of death, and a designated beneficiary who is not an eligible designated beneficiary must also finish within 10 years.

    • IRS Publication 590-B (2025), Ch. 1, Owner Died on or After Required Beginning DateIf the owner died on or after their required beginning date (defined earlier) and you are a designated beneficiary, base your required minimum distributions for years after the year of the owner’s death on the longer of: Checked 2026-10-10.
    • IRS Publication 590-B (2025), Ch. 1, Owner Died on or After Required Beginning DateDistributions to a designated beneficiary who is not an eligible designated beneficiary must be completed within 10 years of the death of the owner. Checked 2026-10-10.

  26. A beneficiary designated under the plan is a person entitled to a portion of the employee's benefit, contingent on the employee's death or another specified event, and whether that person is taken into account for section 401(a)(9) is determined under the September 30 rules.

  27. A charity (a non-individual) named as a beneficiary means the account is treated as having no designated beneficiary, even if individuals are also named, unless the charity's interest is paid out (or it is otherwise removed) by September 30 of the year after the year of death.

    • 26 CFR § 1.401(a)(9)-4 (LII), § 1.401(a)(9)-4(b)If a person other than an individual is a beneficiary designated under the plan , the employee will be treated as having no designated beneficiary , even if individuals are also designated as beneficiaries. Checked 2026-10-09.
    • 26 CFR § 1.401(a)(9)-4 (LII), § 1.401(a)(9)-4(c)if any of the following events occurs by September 30 of the calendar year following the calendar year of the employee 's death, then that beneficiary is not treated as a beneficiary— Checked 2026-10-09.
    • 26 CFR § 1.401(a)(9)-4 (LII), § 1.401(a)(9)-4(c)(2)(iii)The beneficiary receives the entire benefit to which the beneficiary is entitled. Checked 2026-10-09.

  28. After the year of death, the RMD rules apply separately to each beneficiary's interest if held in separate accounts meeting the regulation's separate-accounting requirements; separate accounts set up after the end of the year following the year of death do not get that treatment for earlier purposes.

    • 26 CFR § 1.401(a)(9)-8 (LII), § 1.401(a)(9)-8(a)(1)(i)section 401(a)(9) is applied separately with respect to the separate interests of each of the employee 's beneficiaries under the plan provided that those interests are held in separate accounts Checked 2026-10-09.
    • 26 CFR § 1.401(a)(9)-8 (LII), § 1.401(a)(9)-8(a)(1)(ii)are not established until after the end of the calendar year following the calendar year of the employee 's death Checked 2026-10-09.

  29. If separate accounts meeting the separate accounting requirements are not established until after the end of the calendar year following the year of the employee's death, then for distribution calendar years after those requirements are satisfied the aggregate required distribution is determined without regard to the separate account rule and allocated among the beneficiaries by share.

    • 26 CFR § 1.401(a)(9)-8 (LII), § 1.401(a)(9)-8(a)(1)(ii)If the separate accounts that satisfy the separate accounting requirements of paragraph (a)(2) of this section are not established until after the end of the calendar year following the calendar year of the employee's death, then for distribution calendar years after those requirements are satisfied—(A) The aggregate required distribution for a distribution calendar year is determined without regard to the separate account rule in paragraph (a)(1)(i) of this section Checked 2026-10-11.

  30. For the required minimum distribution rules, a minor child of the employee or IRA owner reaches the age of majority on the individual's 21st birthday, which is when the 10-year payout period begins.

  31. A person is a beneficiary taken into account for section 401(a)(9) if, as of the date of the employee's death, that person is a beneficiary designated under the plan and none of the disregard events has occurred by September 30 of the calendar year following the year of death; those events are predeceasing the employee, being treated as predeceasing under a simultaneous death provision or a qualified disclaimer, or receiving the entire benefit.

    • 26 CFR § 1.401(a)(9)-4 (GPO, CFR 2025 title 26 vol 6), § 1.401(a)(9)-4(c)(1), Time period for determining the beneficiarya person is a beneficiary taken into account for purposes of section 401(a)(9) if, as of the date of the employee's death, that person is a beneficiary designated under the plan and none of the events described in paragraph (c)(2) of this section has occurred with respect to that person by September 30 of the calendar year following the calendar year of the employee's death Checked 2026-10-11.
    • 26 CFR § 1.401(a)(9)-4 (GPO, CFR 2025 title 26 vol 6), § 1.401(a)(9)-4(c)(2)(i)The beneficiary predeceases the employee; Checked 2026-10-11.

  32. The federal estate tax allows an unlimited deduction for bequests to qualifying charities; a split gift (charity gets a remainder) is deductible only through a CRAT, CRUT or pooled income fund.

    • 26 U.S.C. § 2055 (LII), § 2055(a)the value of the taxable estate shall be determined by deducting from the value of the gross estate the amount of all bequests, legacies, devises, or transfers— Checked 2026-10-09.
    • 26 U.S.C. § 2055 (LII), § 2055(e)(2)(A)in the case of a remainder interest, such interest is in a trust which is a charitable remainder annuity trust or a charitable remainder unitrust Checked 2026-10-09.

  33. A donor-advised fund (§ 4966(d)(2)) is a fund or account that is separately identified by reference to a donor's contributions, is owned and controlled by a sponsoring organization, and over which the donor (or the donor's appointee) has or reasonably expects to have advisory privileges over distributions or investments because of being a donor. Once the donor contributes, the sponsoring organization has legal control.

    • 26 U.S.C. § 4966 (LII), § 4966(d)(2)(A)(i)which is separately identified by reference to contributions of a donor or donors, Checked 2026-10-09.
    • 26 U.S.C. § 4966 (LII), § 4966(d)(2)(A)(iii)has, or reasonably expects to have, advisory privileges with respect to the distribution or investment of amounts held in such fund or account by reason of the donor’s status as a donor. Checked 2026-10-09.
    • IRS: Donor-advised funds, Overview paragraphOnce the donor makes the contribution, the organization has legal control over it. Checked 2026-10-09.

  34. A DAF's sponsoring organization must be a § 170(c) organization that is not a private foundation. Because the sponsor is a public charity, a contribution to a DAF is a gift to a public charity for deduction-limit purposes (inference from the definition plus § 170(b)(1)(A)).

    • 26 U.S.C. § 4966 (LII), § 4966(d)(1)(B)is not a private foundation (as defined in section 509(a) ), and Checked 2026-10-09.
    • IRS: Donor-advised funds, Overview paragraphmaintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization Checked 2026-10-09.

  35. A contribution to a DAF is deductible only if the sponsor is not a war veterans' organization, fraternal society, or nonprofit cemetery company (or certain type III supporting organizations) and the donor obtains a contemporaneous written acknowledgment that the sponsor has exclusive legal control over the contributed assets.

    • 26 U.S.C. § 170 (LII), § 170(f)(18)(B)the taxpayer obtains a contemporaneous written acknowledgment (determined under rules similar to the rules of paragraph (8)(C)) from the sponsoring organization (as so defined) of such donor advised fund that such organization has exclusive legal control over the assets contributed. Checked 2026-10-09.
    • IRS Publication 526 (2025), Contributions to Donor-Advised FundsThe qualified organization that sponsors the fund is a war veterans’ organization, a fraternal society, or a nonprofit cemetery company; or Checked 2026-10-09.

  36. Any distribution from a donor-advised fund to a natural person is a 'taxable distribution' under § 4966(c)(1)(A), and § 4966(a)(1) imposes a 20% tax on the sponsoring organization for each taxable distribution. In practice, DAF grants go to charities, not to individuals (including family members).

    • 26 U.S.C. § 4966 (LII), § 4966(c)(1)(A)The term “ taxable distribution ” means any distribution from a donor advised fund— (A) to any natural person, Checked 2026-10-10.
    • 26 U.S.C. § 4966 (LII), § 4966(a)(1)There is hereby imposed on each taxable distribution a tax equal to 20 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the sponsoring organization with respect to the donor advised fund. Checked 2026-10-10.

  37. The recipient must be a § 170(b)(1)(A) organization. Donor-advised funds and § 509(a)(3) supporting organizations are excluded by statute. Private non-operating foundations are excluded because they are not § 170(b)(1)(A) organizations (only foundations described in § 170(b)(1)(F) — operating, pass-through, and pooled-fund — are listed).

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B)(i)(other than any organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2)) Checked 2026-10-09.
    • IRS Notice 2007-7, A-35other than supporting organizations described in § 509(a)(3) or donor advised funds that are described in § 4966(d)(2). Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(A)(vii)(vii) a private foundation described in subparagraph (F), Checked 2026-10-09.

  38. A 'charitable contribution' under § 170(c)(2) must go to an organization created or organized in the United States or a possession, or under US, state or DC law. Because a QCD must be one for which a deduction for the entire distribution would be allowable under § 170, a gift paid directly to a foreign organization generally cannot be a QCD.

    • 26 U.S.C. § 170 (LII), § 170(c)(2)(A)(A) created or organized in the United States or in any possession thereof, or under the law of the United States Checked 2026-10-10.
    • 26 U.S.C. § 408 (LII), § 408(d)(8)(C)only if a deduction for the entire distribution would be allowable under section 170 Checked 2026-10-10.

  39. A CRAT or CRUT is not subject to federal income tax, so it can sell contributed appreciated assets without paying tax at the trust level; unrelated business taxable income is hit with a 100% excise tax. The IRS describes deferral of income tax on sales of contributed assets as a reason to create a CRT; the trust takes the donor's carryover basis.

    • 26 U.S.C. § 664 (LII), § 664(c)(1)shall, for any taxable year, not be subject to any tax imposed by this subtitle. Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(c)(2)(A)there is hereby imposed on such trust or unitrust an excise tax equal to the amount of such unrelated business taxable income. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Reasons to create a charitable remainder trustAllow you to defer income taxes on the sale of assets transferred to the trust Checked 2026-10-09.
    • IRS: Charitable remainder trusts, How a charitable remainder trust worksThe trust's basis in the transferred assets is carryover basis, which is the same basis that it would be in the hands of the donor Checked 2026-10-09.

  40. Unrelated business taxable income includes income from debt-financed property — property held to produce income that is subject to acquisition indebtedness, such as a building with a mortgage on it. So for a charitable remainder trust, whose unrelated business taxable income is hit with a 100% excise tax under § 664(c)(2)(A), part of the income from a mortgaged asset is caught by that tax.

    • 26 U.S.C. § 512 (LII), § 512(b)(4)Notwithstanding paragraph (1), (2), (3), or (5), in the case of debt-financed property (as defined in section 514) there shall be included, as an item of gross income derived from an unrelated trade or business, the amount ascertained under section 514(a)(1), and there shall be allowed, as a deduction, the amount ascertained under section 514(a)(2). Checked 2026-10-11.
    • 26 U.S.C. § 514 (LII), § 514(b)(1)For purposes of this section, the term "debt-financed property" means any property which is held to produce income and with respect to which there is an acquisition indebtedness (as defined in subsection (c)) at any time during the taxable year Checked 2026-10-11.
    • 26 U.S.C. § 514 (LII), § 514(c)(1)For purposes of this section, the term "acquisition indebtedness" means, with respect to any debt-financed property, the unpaid amount of— Checked 2026-10-11.

  41. Charitable remainder trusts are irrevocable, and each CRT must file Form 5227 annually.

    • IRS: Charitable remainder trusts, How a charitable remainder trust worksCharitable remainder trusts are irrevocable. Assets that go in can't be taken back. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Tax filingsCharitable remainder trusts must annually file Form 5227, Split-Interest Trust Information Return . Checked 2026-10-09.

  42. A charitable remainder annuity trust (CRAT) pays a fixed sum each year of at least 5% and no more than 50% of the initial net fair market value of the trust property, at least annually, for life or lives of individuals living when the trust is created or for a term of no more than 20 years; the remainder goes to charity.

    • 26 U.S.C. § 664 (LII), § 664(d)(1)(A)a sum certain (which is not less than 5 percent nor more than 50 percent of the initial net fair market value of all property placed in trust) is to be paid, not less often than annually Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(d)(1)(A)for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Types of charitable remainder trustsA charitable remainder annuity trust (CRAT) pays a specific dollar amount each year. Checked 2026-10-09.

  43. A charitable remainder unitrust (CRUT) pays a fixed percentage, at least 5% and no more than 50%, of the trust's net fair market value revalued every year, so payments rise and fall with the trust's value.

    • 26 U.S.C. § 664 (LII), § 664(d)(2)(A)a fixed percentage (which is not less than 5 percent nor more than 50 percent) of the net fair market value of its assets, valued annually Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Types of charitable remainder trustsThe payments generally must equal at least 5% and no more than 50% of the fair market value of the assets, valued annually. Checked 2026-10-09.

  44. A charitable remainder unitrust's payments, like a charitable remainder annuity trust's, may run only for a term of years not in excess of 20 years, or for the life or lives of individuals living when the trust is created.

    • 26 U.S.C. § 664 (LII), § 664(d)(2)(A)for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals Checked 2026-10-11.
    • 26 U.S.C. § 664 (LII), § 664(d)(2)(A)from which a fixed percentage (which is not less than 5 percent nor more than 50 percent) of the net fair market value of its assets, valued annually, is to be paid, not less often than annually, to one or more persons (at least one of which is not an organization described in section 170(c) and, in the case of individuals, only to an individual who is living at the time of the creation of the trust) for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals, Checked 2026-10-11.

  45. The value of the charitable remainder, determined under § 7520, must be at least 10% of the net fair market value of the property placed in the trust (for a CRUT, tested at each contribution).

    • 26 U.S.C. § 664 (LII), § 664(d)(1)(D)the value (determined under section 7520) of such remainder interest is at least 10 percent of the initial net fair market value of all property placed in the trust Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(d)(2)(D)with respect to each contribution of property to the trust, the value (determined under section 7520) of such remainder interest in such property is at least 10 percent Checked 2026-10-09.
    • IRS: Charitable remainder trusts, How a charitable remainder trust worksThe remainder donated to charity must be at least 10% of the initial net fair market value of all property placed in the trust Checked 2026-10-09.

  46. Payments from a CRT carry out the trust's income in four tiers: first ordinary income (current and undistributed prior), then capital gain, then other income (including tax-exempt income), then tax-free return of corpus. Payments are reported to the beneficiary on Schedule K-1 (Form 1041).

    • 26 U.S.C. § 664 (LII), § 664(b)(1)First, as amounts of income (other than gains, and amounts treated as gains, from the sale or other disposition of capital assets) includible in gross income Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(b)(2)Second, as a capital gain to the extent of the capital gain of the trust for the year and the undistributed capital gain of the trust for prior years Checked 2026-10-09.
    • 26 U.S.C. § 664 (LII), § 664(b)(4)Fourth, as a distribution of trust corpus. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Taxes on income paymentsOther income: Once all ordinary income and capital gains in the trust are fully distributed, payments are characterized as other income to the extent of the trust's current year and accumulated other income. This includes tax-exempt income. Checked 2026-10-09.
    • IRS: Charitable remainder trusts, Taxes on income paymentsmust be reported to them on Schedule K-1 (Form 1041) Checked 2026-10-09.

  47. A QCD is excluded from gross income and cannot also be claimed as a charitable deduction. Only the portion that would otherwise be taxable can be a QCD; when an IRA has nondeductible basis, the QCD is treated as coming first from the taxable (pre-tax) money, overriding the normal pro-rata rule.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(E)shall not be taken into account in determining the deduction under section 170. Checked 2026-10-09.
    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B), flush languageA distribution shall be treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to subparagraph (A). Checked 2026-10-09.
    • 26 U.S.C. § 408 (LII), § 408(d)(8)(D)Notwithstanding section 72, in determining the extent to which a distribution is a qualified charitable distribution Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 2, QCDsIf your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income. Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 2, QCDsYou can't claim a charitable contribution deduction for any QCD not included in your income. Checked 2026-10-09.

  48. Adjusted gross income means, for an individual, gross income minus the deductions listed in § 62(a), so an amount excluded from gross income never enters AGI.

    • 26 U.S.C. § 62 (LII), § 62(a)For purposes of this subtitle, the term "adjusted gross income" means, in the case of an individual, gross income minus the following deductions: Checked 2026-10-12.

  49. QCDs may come from a traditional IRA, an inherited IRA if the beneficiary is 70½. Only an amount that would otherwise be includible in gross income can be a QCD (§ 408(d)(8)(B)), so a qualified (tax-free) Roth IRA distribution cannot be one. A SEP or SIMPLE IRA is eligible only if it is not "ongoing" — i.e., no employer contribution for the plan year ending with or within the tax year. 401(k), 403(b) and other employer plans are not IRAs and cannot make QCDs.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B)means any distribution from an individual retirement plan (other than a plan described in subsection (k) or (p)) Checked 2026-10-09.
    • IRS Notice 2007-7, A-36that is neither an ongoing SEP IRA described in § 408(k) nor an ongoing SIMPLE IRA described in § 408(p). Checked 2026-10-09.
    • IRS Notice 2007-7, A-37is available for distributions from an IRA maintained for the benefit of a beneficiary after the death of the IRA owner if the beneficiary has attained age 70½ Checked 2026-10-09.
    • Instructions for Forms 1099-R and 5498 (current online version, covers 2026), Box 7a, Qualified charitable distributions (QCDs)Code 4 for a QCD from an inherited (death distribution) IRA Checked 2026-10-09.

  50. A SEP or SIMPLE IRA is 'ongoing' (and cannot make a QCD) if an employer contribution is made for the plan year ending with or within the owner's tax year. SIMPLE salary-reduction deferrals are made as elective employer contributions, so money deferred from your own pay into a SIMPLE IRA makes it ongoing.

    • IRS Notice 2007-7, A-36a SEP IRA or a SIMPLE IRA is treated as ongoing if it is 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 the charitable contributions would be made. Checked 2026-10-10.
    • 26 U.S.C. § 408 (LII), § 408(p)(2)(A)(i)as elective employer contributions to a simple retirement account on behalf of the employee Checked 2026-10-10.

  51. The annual QCD exclusion was $100,000 through 2023 and is inflation-indexed for tax years beginning after 2023 (SECURE 2.0 § 307), rounded to the nearest $1,000: $105,000 for 2024, $108,000 for 2025, $111,000 for 2026.

  52. The limit applies per IRA owner. On a joint return each spouse may exclude up to the limit, but only from IRAs that spouse owns; one spouse cannot use the other's unused limit.

    • IRS Publication 590-B (2025), Ch. 2, QCDsIf you file a joint return, your spouse can also have a QCD and exclude up to $108,000. Checked 2026-10-09.
    • IRS Notice 2007-7, A-34For married individuals filing a joint return, the limit is $100,000 per individual IRA owner. Checked 2026-10-09.

  53. The QCD exclusion cap applies to the aggregate amount of qualified charitable distributions with respect to a taxpayer during a taxable year, not per account.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(A)So much of the aggregate amount of qualified charitable distributions with respect to a taxpayer made during any taxable year which does not exceed $100,000 shall not be includible in gross income of such taxpayer for such taxable year. Checked 2026-10-09.

  54. A distribution is a QCD only to the extent it would be includible in gross income without the QCD exclusion (§ 408(d)(8)(B) flush language). A qualified Roth IRA distribution is not includible, so it cannot be a QCD.

    • 26 U.S.C. § 408(d)(8)(B), § 408(d)(8)(B), flush languageA distribution shall be treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to subparagraph (A). Checked 2026-10-10.

  55. A qualified distribution from a Roth IRA is not includible in gross income (§ 408A(d)(1)).

    • 26 U.S.C. § 408A (LII), § 408A(d)(1)(A)Any qualified distribution from a Roth IRA shall not be includible in gross income. Checked 2026-10-09.