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Donor-Advised Funds for Retirees: Rules, Tax Deduction and When to Fund One

Josh Rendler, CFP®

Creator of Motion Retirement

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

What is a donor-advised fund, and how does the tax deduction work?

A donor-advised fund is a giving account run by a charity, called the sponsoring organization (the charity that runs a donor-advised fund). You put money or stock in now and pick the charities later. You get the tax deduction in the year you give to the fund, but only if you itemize. A DAF can't take a QCD (money sent straight from your IRA to a charity at 70½ or older, not taxed as income, up to a yearly limit) from your IRA.

  • A gift to a DAF is deductible in the year you make it, but only if you itemize. The fund can pay charities over many later years.
  • If you itemize, a DAF gift lowers your taxable income (the part of your income that tax rates are actually charged on). It does not lower your AGI (your total income minus a few set subtractions, the number many tax rules start from). A QCD does lower AGI, but a QCD can't go to a DAF.
  • Gifts to a DAF don't count for the new 2026 deduction for people who don't itemize. That deduction is for cash given straight to a public charity (a charity like a church, school or hospital that gets the best tax treatment for gifts), up to $1,000 ($2,000 on a joint return).
  • A DAF can't give money to a person, including family. Federal law sets no yearly amount a DAF must pay out.
  • A gift counts in the year you deliver it. Sponsors set their own year-end cutoffs, and stock held at another firm takes longer.
Jump to a question

A DAF is a timing tool. It splits the year you take the deduction from the years the charities get the money.

That helps a great deal in some years, and very little in others. If you’re 70½ or older with a traditional or inherited IRA (an IRA you get from someone who died), a QCD is worth weighing. It often covers the same giving at a lower tax cost. A traditional or inherited IRA, or a SEP or SIMPLE IRA with no employer contribution that year.12

Here’s how I think about it. A DAF tends to earn its place in three kinds of years. One is a year when income is high. Another is a year when you have stock that has grown a great deal. The third is a year when you pack several years of gifts together so itemizing (costs like charity gifts you list one by one on your return instead of the flat amount) pays off. If none of those fit, a DAF mostly adds a step.

What is a donor-advised fund?

It’s a charity’s account, in your name, that holds your gifts until you pick where they go. What kind of charity you give to matters for your taxes, because that sets your deduction caps. There are two kinds of charity to know here: a public charity and a private foundation (a charity funded mostly by one person, family or company, not a public charity). A DAF’s sponsor can’t be the second kind. Mainstream sponsors are public charities, so their gifts get the public-charity caps. But a few rare kinds of sponsor get no deduction at all, as the note below explains. The rule below sets out the caps. One more kind comes up below: a supporting organization (a charity set up to help one or more specific public charities).

A donor-advised fund is an account held by a charity, called a sponsor, under your name.3 Once you give, the sponsor controls the money, and you only advise on grants and investments.3 The sponsor can’t be a private foundation.4 So by my reading, a gift to a sponsor that is a public charity counts as one.4 A few kinds of sponsor are ruled out by name, and gifts to those aren’t deductible.5 Those are a veterans’ group, a fraternal society, a cemetery company, or certain supporting organizations.5 Your receipt from the sponsor must also say the sponsor has full legal control of what you gave, or there’s no deduction.5 On a grant to a person, even family, the sponsor would owe a 20% tax.6 So sponsors make grants to charities, not to people.6

The key word is “advise.” You suggest grants. The sponsor approves them and sends the checks. In practice, sponsors approve most grants to real charities.

But the gift is final. You can’t take the money back.

Sponsors include charities tied to investment firms, community foundations, and some religious and college charities. This site doesn’t recommend any sponsor.

How does a donor-advised fund work, step by step?

Most DAFs work in four steps. Each sponsor sets its own forms, minimums and fees.

  1. Pick a sponsor and open an account. You name the account and, often, people who can advise after you.
  2. Give cash, stock or other assets. Keep the sponsor’s receipt. The gift is deducted in the year you deliver it, as shown under the deadline below.
  3. Let it sit invested. You can suggest how it’s invested, from the sponsor’s menu. The sponsor is a charity, so the growth isn’t taxed. By my reading, the charity owes no income tax on it.78
  4. Suggest grants to charities. You can do that this year or over many years. The sponsor checks each charity and pays it.

Why would I use a donor-advised fund?

To take a big deduction now and decide later which charities get the money. Three things make it worth a look:

  1. A high-income year. A deduction saves more tax when your top tax rate is higher.
  2. Stock that has grown. Many small charities can’t easily take shares. A sponsor usually can, then sends cash to as many charities as you like.
  3. Packing gifts into one year. This is called bunching (giving several years of gifts in one year so they are big enough to deduct). If your deductions usually fall short of the standard deduction (the flat amount most people can subtract from income without listing costs), a few years of gifts in one year can push you over. See bunching charitable deductions.

A DAF also gives you one receipt for many gifts. That’s a convenience, not a tax break.

Related video Age 59 Tax Moves to Make BEFORE You Retire · donating vs. deducting, and bunching through a DAF

Does a donor-advised fund reduce taxable income?

Yes, if you itemize. Whether it also lowers your AGI is a separate question, and that matters for IRMAA (an extra Medicare charge you pay when your income is above a set line).

To deduct a gift the usual way, you must itemize on Schedule A.9 You get either your itemized deductions or the standard deduction, not both.10 Itemized deductions lower your taxable income, but not your AGI.1112 So they don’t lower measures built on AGI, like the income used for IRMAA.12

When the sponsor later pays charities, you get no second deduction. The sponsor is making those gifts, not you.

The AGI part matters in retirement. Some costs are tied to AGI, or to a version of it. One is the Medicare charge called IRMAA.

IRMAA uses your AGI plus tax-exempt interest.13 It generally uses the return from two years earlier, so 2026 premiums use 2024 returns.1413 Each person on Medicare whose income is above the line for their filing status pays it.15

How much of your Social Security is taxed works much the same way. Half your benefits plus other income, including tax-exempt interest.1617

A QCD is left out of income, so it lowers AGI. A DAF gift can’t. See how giving fits with retirement taxes. Left out of income before AGI, so it can't also be deducted.1819

Do you pay taxes on a donor-advised fund?

No, not on the growth. By my reading, the charity owes no income tax on it.78 You also don’t pay tax when it sends grants. You simply don’t get a second deduction then.

What it takes to claim the deduction

You need the sponsor’s written receipt. What it has to say depends on whether you gave cash or property (anything you own other than cash, such as stock or a fund, not just a house).

A gift of $25020 or more needs a written receipt from the charity.21 It must give the cash amount, or describe any property, and say whether you got anything back.2122 If you did, it must describe it and estimate its value.21 You must have it by the day you file, or your return’s due date plus any extension you got, whichever comes first.2322

A DAF receipt has one more job to do, and the sponsor has to be the right kind of charity. Both are covered above, under what a donor-advised fund is. Sponsors send these receipts as a matter of course. One rarer kind of sponsor is in the note below.

Gifts other than cash can also mean filing Form 8283 (the tax form you add when you deduct gifts of things other than cash, like stock). Form 8283 if non-cash gifts top $500 for the year.2425262728

For CPAs and attorneysDAF sponsor and definition details

The DAF definition is § 4966(d)(2). A sponsoring organization under § 4966(d)(1) has three elements: it (A) is described in § 170(c), other than paragraph (1) (governmental units are excluded) and without regard to paragraph (2)(A) (the domestic-creation test is ignored), (B) “is not a private foundation (as defined in section 509(a)),” and (C) “maintains 1 or more donor advised funds.” 29 Under § 170(f)(18), no deduction is allowed if the sponsor is described in § 170(c)(3), (4) or (5), or is a type III supporting organization that is not functionally integrated, and the contemporaneous written acknowledgment must state the sponsor’s exclusive legal control. 30 5

How much can I deduct for a DAF gift?

There are yearly caps based on your AGI, and from 2026 a 0.5% floor (a 2026 rule: the first sliver of your charity gifts, half a percent of income, is not deductible). A DAF gift counts as a gift to a public charity, so it gets the higher caps.

The yearly caps and the 0.5% floor are shares of your AGI, figured without any net operating loss carryback.31 So a lower AGI also lowers the caps.31

The caps are laid out on the charitable deductions page, with how other gifts use up the room.

An amount over the cap isn’t lost right away. It becomes a carryover (the part of a gift too big to deduct this year, saved for up to five later years).

Gifts over a yearly cap can be deducted in the next five years, but not after that.32 In those years, they generally keep the same cap.32 Within each kind of gift, new gifts are used before carryovers, and older carryovers before newer ones.33 Qualified conservation gifts get 15 years instead of five.34

But a carryover only helps in a later year when you itemize. So if you take the standard deduction in retirement, a carryover may never get used, by my reading. See charitable deduction carryforwards. Itemized, so it lowers taxable income but not AGI.9101211

Two 2026 rules can also trim the deduction if you itemize. The first is the 0.5% floor, and it reaches every itemizer.

From 2026, if you itemize, your gifts count only above 0.5% of your AGI.35 By my reading, the floor comes off after the yearly AGI caps.36 It comes off in a set order, starting with gifts under the 20% cap and ending with cash to public charities.37

Gifts lost to the 0.5% floor carry over only from a year when gifts went over a yearly AGI cap.38 Even then, only the floor amount tied to the kind of gift that went over joins the carryover.39 Otherwise, the amount lost to the floor is gone.38

The second is narrower. The rule below sets out whose taxable income it reaches, and how much it trims.

From 2026, itemized deductions are trimmed if your income reaches the 37% bracket.40 The trim is 2/37 of the smaller of two amounts: those deductions, or your income above where that bracket starts.40 That income is counted before itemized deductions come off.41 The trim comes after every other limit, so each dollar fully hit saves about 35 cents.4140

Both are explained at 2026 charitable deduction changes.

Should I give cash or stock to a DAF?

Stock that has grown is often the better gift, if you’ve held it more than a year.

Stock held over a year and given to a public charity is generally deducted at its value that day.42 Held one year or less, the deduction is generally the lower of what you paid or its value.43 Stock worth less than you paid is deducted at its value, and the loss isn’t deductible.44 Traded stock is valued at the average of its high and low prices that day.45 If it didn’t trade that day, you average the nearest trading days before and after.46 That method applies when those trading days fall within a reasonable period of your gift.46 That average is weighted, so the trading day closer to your gift counts for more.47

Because you give the shares instead of selling them, you generally pay no tax on the gain. One exception is a sale the charity was already bound to make. See giving stock that has grown. In a buyback, the gain is yours only if the charity was bound to give up the shares.48

What you give What you deduct Tax on the gain Yearly cap
Cash The amount given None 60% of AGI
Stock held more than 1 year that has grown What it’s worth today Generally none, you never sell 30% of AGI
Stock held 1 year or less What you paid, or today’s value if lower None 50% of AGI
Stock worth less than you paid What it’s worth today; the loss is gone None 50% of AGI

Some sponsors also take harder assets, like private company shares or crypto. Each sponsor decides what it will accept and how much lead time it needs. Those assets usually need an appraisal, and traded stock doesn’t.

If your deduction for non-cash gifts tops $50025 for the year, you attach Form 8283.24 Stock traded on a public market goes in Section A, at any amount.25 Say your deduction for other property is more than $5,00025.26 Then you generally need a qualified appraisal, and the gift goes in Section B.2625 For stock that isn’t publicly traded, the appraisal starts above $10,000, though Section B still applies.28 For the $5,00025 amount, similar items you gave count as one gift.27

Which shares should I give?

The shares with the biggest gain for their value usually avoid the most tax per dollar given. If you bought the same fund at different times, each purchase is a tax lot (one batch of shares bought on the same day at the same price) with its own cost basis (what you paid for an investment, or after-tax money put in an IRA, used to figure what part is taxed).

If you bought shares at different times and don’t say which ones you’re giving, the oldest shares go first.49 With a broker, you pick the shares by telling the broker when you give them.49 The broker must then confirm your choice in writing within a reasonable time.49 Keep that confirmation.49 Mutual fund shares can use your average cost instead.50

Old shares often cost the least, so the default usually works out. Still, it’s worth checking the transfer form.

Shares that have lost value are different. Giving those caps the deduction at today’s value, and the loss is never used. Selling them, claiming the loss and giving the cash usually comes out ahead. Its value on the day you give it, if held more than one year.424344454647

Capital losses first offset capital gains.51 Beyond that, you can deduct up to $3,000 a year against other income, or $1,500 if married filing separately.51 The rest carries to the next year.51

When is the deadline to fund a DAF for this year?

A gift counts in the year you deliver it, not the year you ask.

A gift is deducted in the year you pay it.52 A mailed check counts on the day you mail it, if it clears.5354 A gift on a credit card counts in the year you make the charge.53 A stock certificate you sign over counts the day you deliver or mail it to the charity.5554 Stock sent through your own broker or the company counts only when it is moved into the charity’s name.55

That last part is the one that bites. A transfer you start in late December can land in January.

Sponsors also set their own cutoffs. They vary by sponsor and by what you give:

  • Cash, and stock already at the sponsor’s own firm, often have the latest cutoffs, close to December 31.
  • Stock or funds at a different firm take longer, because that firm has to send them. Mutual funds can take weeks.
  • Private shares and other hard-to-value assets often need paperwork weeks earlier.

Sponsors post these dates each fall and change them. It’s worth checking the current ones with yours. Many retirees find it easier to finish by early December.

Can I put my RMD into a donor-advised fund?

Not as a QCD. The law shuts DAFs out by name, along with a supporting organization.

A QCD must go to a public charity or one of a few special kinds of foundation.56 It can’t go to a donor-advised fund, a supporting organization, or most private foundations.56 The charity generally has to be organized in the United States or a U.S. possession.57 Being organized under U.S., state or D.C. law also counts.57

If your IRA sends money to a DAF, it’s a regular taxable withdrawal. You can take your RMD (the least you must take out of a regular IRA each year once you reach a set age) as a normal withdrawal and then give the cash to a DAF. But the RMD stays in your AGI. The gift only helps if you itemize, and the caps and the floor apply.

For many people, a QCD straight to their charities costs less tax. The side-by-side is at DAF vs. QCD.

Do DAF gifts count for the new 2026 deduction?

No. A DAF gift is deductible only if you itemize. Starting in 2026, people who take the standard deduction can deduct some cash gifts. A gift to a DAF or a supporting organization isn’t one of them.

From 2026, if you don’t itemize, you can deduct up to $1,00058 of cash gifts, or $2,00058 on a joint return.58 The cash must go to a public charity, or one of a few special foundations, not a donor-advised fund or a supporting organization.5960 Gifts of stock or other property don’t count, and neither do carryovers from earlier years.59 It lowers your taxable income, but not your AGI.61

So if you don’t itemize, a DAF gift saves no federal tax. The same cash given straight to a charity can.

Can I give money from my DAF to a family member?

No. Here is the rule again, in full:

A donor-advised fund is an account held by a charity, called a sponsor, under your name.3 Once you give, the sponsor controls the money, and you only advise on grants and investments.3 The sponsor can’t be a private foundation.4 So by my reading, a gift to a sponsor that is a public charity counts as one.4 A few kinds of sponsor are ruled out by name, and gifts to those aren’t deductible.5 Those are a veterans’ group, a fraternal society, a cemetery company, or certain supporting organizations.5 Your receipt from the sponsor must also say the sponsor has full legal control of what you gave, or there’s no deduction.5 On a grant to a person, even family, the sponsor would owe a 20% tax.6 So sponsors make grants to charities, not to people.6

Help for family has to come from your own accounts. For a big family gift, some people give shares that have grown. The person who gets them usually takes over your cost. 62 They then owe tax on the gain when they sell. Whether that fits depends on their tax rate.

Two more points matter here. A gift above the yearly gift-tax exclusion means filing a gift tax return, even if no tax is due. 63 By my reading, gifts into a trust, and gifts a married couple chooses to split, can need a return at any size. 64 A few kinds of gift are outside the filing rule. Outright gifts to your spouse, if your spouse is a US citizen, normally need no return. 65 A gift to a trust for your spouse can still need one. 66 A gift of your whole interest in something to charity normally needs no return either. 63 Tuition you pay straight to the school isn’t treated as a gift at all, in any amount. 67 Books, supplies, dorm fees and board aren’t tuition, so they don’t get that treatment. 67 Bills for medical care, paid straight to the provider, are treated the same way as tuition. 67 And for shares worth less than you paid, the cost the other person takes over is limited. 68 For figuring a loss, it’s capped at what the shares were worth on the day you gave them. 68

How long can money stay in a DAF?

As long as the sponsor allows. Federal law sets no yearly amount a DAF must pay out. 69 The payout rule in the tax code is for private foundations, and a DAF sponsor can’t be one. 69

Sponsors can set their own rules, though. Some act on accounts that make no grants for several years. Those rules vary, so they’re worth reading before you open an account.

This is also why DAFs get criticized. Money can sit for years before a working charity gets it. The IRS has proposed new DAF rules, but they aren’t final. They don’t add a payout rule either. 70 69

For CPAs and attorneysStatus of the § 4966 proposed regulations

Treasury and the IRS proposed regulations under § 4966 (REG-142338-07, 88 FR 77922, November 14, 2023). They would apply to taxable years ending after final regulations are published. As of October 10, 2026, the Federal Register shows hearing notices and a correction from 2024 but no final rule. 70 The proposed regulations address definitions (DAF, donor, donor-advisor, taxable distribution) and do not add a payout requirement; the preamble describes payout requirements as applicable to private foundations and certain supporting organizations. 69 Guidance under § 4967 remains the interim guidance in Notice 2017-73. 71

How is a DAF different from a private foundation?

A DAF is simpler and gets better tax caps. A private foundation gives you more control, but it costs more to run.

Donor-advised fund Private foundation (most kinds)
Cap on cash gifts 60% of AGI 30% of AGI
Gifts of stock held more than a year Today’s value, up to 30% of AGI Up to 20% of AGI Generally what you paid; publicly traded stock gets full value.7273
Must pay out each year No set amount About 5% of its investments
Tax on investment income None 1.39%
Who has legal control The sponsor The foundation’s own board

Most private foundations, the non-operating kind, must pay out about 5% of their investment assets each year.74 No such rule applies to a donor-advised fund.74 A private foundation also pays a 1.39% tax on its net investment income each year.75

Stock that grew, given to most private foundations, is generally deducted at what you paid.72 Stock traded on a public market is the exception and counts at full value.72 Full value counts only up to 10% of that company’s stock.72 Your earlier gifts and your family’s gifts count toward that 10%.73

A few kinds of foundation, such as operating foundations, get the same caps as a public charity.

For most retirees giving a few thousand to a few hundred thousand dollars, a foundation’s costs and filings are hard to justify. It may be worth considering for very large gifts, or when family control matters most.

What are the downsides of a donor-advised fund?

The main ones: the gift is final, it doesn’t lower AGI, and it has ongoing costs.

  • It’s final. The sponsor controls the money once you give. If your money needs change, it’s still set aside for charity.
  • No AGI drop. For people 70½ and up with a traditional IRA, that often makes a DAF weaker than a QCD for yearly giving.
  • No QCDs, and no deduction for people who don’t itemize.
  • Fees. Sponsors charge account fees, and the funds inside have their own costs. Fees and minimums differ, so it’s worth comparing sponsors first.
  • Limits on grants. No grants to people, and limits on grants that benefit you.

What can a DAF grant pay for?

A DAF grant generally can’t buy you anything. The tax code adds a tax when a grant gives the donor, or someone close to them, more than a small benefit. 76

The IRS has said it may treat gala tickets paid by a DAF as more than a small benefit. It said the same about a DAF paying part of a membership while you pay the rest. 76

A common approach is to pay for anything you get, like tickets or memberships, from your own bank account. The DAF then makes pure gifts only.

Can a DAF grant pay off a pledge?

When should you fund a donor-advised fund?

Often in a year when a deduction is worth more than usual. These are things to weigh, not rules. Whether one fits depends on your income, your giving and your other deductions.

After 70½, things shift for IRA owners. For yearly giving, QCDs often come out ahead, because they lower AGI. Once you reach your RMD age, they also count toward your RMD. A DAF can still help with stock and in a high-income year. See DAF vs. QCD. Counts toward your RMD for the year.7778 73 or 75, depending on birth year.7980

Worked example · tax year 2026Giving stock to a DAF in the last working year
Assumptions
  • Married filing jointly, both under 65, AGI of $400,000 in 2026, the last full working year.
  • They give about $15,000 a year to charity and plan to keep doing so for six years.
  • They give stock worth $90,000, bought for $30,000 more than a year ago, to a DAF in 2026.
  • Other itemized deductions (state and local taxes, mortgage interest) total $20,000. No other charitable gifts in 2026.
  • The deduction is valued at the 2026 federal bracket for this taxable income (shown below); it is not the 37% bracket, so the 2/37 reduction does not apply. Without the gift they would take the standard deduction ($32,200), since their other itemized deductions are smaller. If they had sold the shares instead, the long-term gain would be taxed at 15% plus the 3.8% net investment income tax (18.8% total), which at this income reaches the full gain.
  • Both spouses are under 65, so no senior deduction applies in this example.
Step How it’s figured Amount
1. 30% cap for stock that has grown $400,000 × 30% $120,000
2. Stock given (under the cap) Value today $90,000
3. 0.5% floor $400,000 × 0.5% $2,000
4. Charity deduction allowed $90,000 − $2,000 $88,000
5. Total itemized deductions $88,000 + $20,000 $108,000
6. Extra over the standard deduction $108,000 − $32,20081 $75,800
7. Taxable income without and with the gift $400,000 − $32,200; $400,000 − $108,000 $367,800; $292,000
8. Federal income tax saved (both incomes in the same bracket) $75,800 × 24%82 $18,192
9. Gain never sold $90,000 − $30,000 $60,000
10. Tax on the gain avoided (if they would have sold) $60,000 × 18.8% $11,280

The DAF then pays about $15,000 a year for six years. That’s $90,000, plus or minus how the investments do. In retirement, with lower income, they take the standard deduction. Once 70½, if they have a traditional IRA, they could shift yearly gifts to QCDs.

The 3.8% net investment income tax applies to the smaller of your investment income or your income above a threshold.83 By my reading, gain on stock you give away and never sell isn’t counted.83

The floor is one amount for the whole year, not one per gift.

From 2026, if you itemize, your gifts count only above 0.5% of your AGI.35 By my reading, the floor comes off after the yearly AGI caps.36 It comes off in a set order, starting with gifts under the 20% cap and ending with cash to public charities.37

So here it’s a one-time $2,000 of deduction lost, not tax paid. Six separate $15,000 gifts while itemizing would face the floor every year.

What happens to a donor-advised fund when the owner dies?

It depends on the sponsor’s account rules, not tax law. Most sponsors let you name successors, often your children, who keep suggesting grants. Or you can name charities to get what’s left.

Either way, the money stays with charity. It was given away when you made the gift. It’s worth checking your successor names when you update your estate plan. Do the same for any charity beneficiaries on your IRAs.

Common mistakes

  • Sending a QCD to a DAF. It isn’t a QCD, and the withdrawal is taxed.
  • Counting a DAF gift for the new deduction for people who don’t itemize. It doesn’t count.
  • Asking the DAF to pay a relative. Grants to people aren’t allowed.
  • Starting a stock transfer from another firm in late December. The gift counts when the shares move, and outside assets have earlier cutoffs.
  • Giving shares that lost value. The loss is gone and the deduction is capped at today’s value.
  • Buying gala tickets through the DAF. The IRS has said it may treat that as more than a small benefit.
  • Losing the sponsor’s receipt. Without it, there’s no deduction.

Sources (83)

Show

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. To deduct charitable contributions in the ordinary way, an individual must itemize on Schedule A.

    • IRS Publication 526 (2025), DeductionsGenerally, to deduct a charitable contribution, you must itemize deductions on Schedule A (Form 1040). Checked 2026-10-09.

  10. No itemized deduction is allowed unless the individual elects to itemize for the year; the taxpayer takes either itemized deductions or the standard deduction.

    • 26 U.S.C. § 63 (LII), § 63(e)(1)Unless an individual makes an election under this subsection for the taxable year, no itemized deduction shall be allowed for the taxable year. Checked 2026-10-10.

  11. Itemized deductions (including the ordinary charitable deduction) are, by definition, deductions other than those allowable in arriving at adjusted gross income, so they reduce taxable income but not AGI.

    • 26 U.S.C. § 63 (LII), § 63(d)the term “ itemized deductions ” means the deductions allowable under this chapter other than— (1) the deductions allowable in arriving at adjusted gross income Checked 2026-10-10.

  12. AGI is gross income minus the deductions listed in § 62(a). Itemized deductions are, by definition, the deductions other than those allowable in arriving at AGI, and taxable income is gross income minus the deductions allowed. So an itemized charitable deduction (including one for a gift to a donor-advised fund or of appreciated stock) reduces taxable income but not AGI, and therefore not MAGI measures built on AGI, such as the IRMAA MAGI (AGI plus tax-exempt interest).

    • 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 2026-10-10.
    • 26 U.S.C. § 63 (LII), § 63(d)For purposes of this subtitle, the term “itemized deductions” means the deductions allowable under this chapter other than— (1) the deductions allowable in arriving at adjusted gross income, and (2) any deduction referred to in any paragraph of subsection (b). Checked 2026-10-10.
    • 26 U.S.C. § 63 (LII), § 63(a)Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction). Checked 2026-10-10.

  13. Medicare IRMAA is determined from MAGI, defined as AGI plus tax-exempt interest, generally from the tax return two years before the premium year (2026 premiums generally use 2024 returns).

  14. IRMAA is based on modified AGI = AGI (Form 1040 line 11) plus tax-exempt interest, using the most recent tax data IRS can provide: generally the return from two years before the premium year (2026 premiums generally use 2024 returns), but not more than three years prior.

    • SSA POMS HI 01101.010 (12/02/2025), A.1the beneficiary’s adjusted gross income (AGI) (found on line 11 of the Internal Revenue Service (IRS) tax filing form 1040), plus • tax-exempt interest income (line 2a of IRS Form 1040). Checked 2026-10-09.
    • SSA POMS HI 01101.010 (12/02/2025), A.2Generally, the information is from two years prior to the year for which the premium is being determined, but not more than three years prior. For example, 2026 premiums are generally based on 2024 tax return information. Checked 2026-10-09.

  15. IRMAA is assessed per Medicare beneficiary: each enrolled beneficiary whose MAGI is above the threshold for their tax filing status pays an IRMAA; the joint-filer threshold is a single figure for the joint return.

    • SSA POMS HI 01101.001, A.1and have modified adjusted gross income (MAGI), (see HI 01101.010 ) above the threshold for their tax filing status pay an IRMAA in addition to the monthly premium. Checked 2026-10-09.
    • SSA POMS HI 01101.010, BMarried, filing jointly $194,000 $206,000 $212,000 $218,000 Checked 2026-10-09.

  16. Whether, and how much of, Social Security benefits are taxable depends on modified adjusted gross income plus one-half of benefits compared with a base amount; that modified AGI starts from adjusted gross income (increased by tax-exempt interest). Income excluded from AGI, such as a QCD, therefore does not enter the test.

    • 26 U.S.C. § 86 (LII), § 86(b)(1)the modified adjusted gross income of the taxpayer for the taxable year, plus (ii) one-half of the social security benefits received during the taxable year, exceeds (B) the base amount Checked 2026-10-09.
    • 26 U.S.C. § 86 (LII), § 86(b)(2)increased by the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax. Checked 2026-10-09.

  17. To test whether Social Security benefits are taxable, compare one-half of benefits plus all other income (including tax-exempt interest) with a base amount for the filing status; above it, part of benefits may be taxable, generally up to 50%, and up to 85% above a second, higher amount. The base amounts are fixed dollar figures (not inflation-indexed in the publication).

    • IRS Publication 915 (2025), Are Any of Your Benefits Taxable?compare the base amount (explained later) for your filing status with the total of: One-half of your benefits; plus All your other income, including tax-exempt interest. Checked 2026-10-09.
    • IRS Publication 915 (2025), Base amountYour base amount is: $25,000 if you are single, head of household, or qualifying surviving spouse; Checked 2026-10-09.
    • IRS Publication 915 (2025), Maximum taxable partGenerally, up to 50% of your benefits will be taxable. However, up to 85% of your benefits can be taxable if either of the following situations applies to you. The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Checked 2026-10-09.

  18. 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.

  19. 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.

  20. The QCD must satisfy § 170 deductibility rules (other than percentage limits), including the contemporaneous written acknowledgment requirement for gifts of $250 or more. Any benefit received (e.g., a gala dinner) can disqualify the QCD because the entire distribution must be deductible.

    • 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 2026-10-09.
    • IRS Notice 2007-7, A-39including the substantiation requirements under § 170(f)(8). Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(A)No deduction shall be allowed under subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 2, QCDsyou must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution. Checked 2026-10-09.

  21. The contemporaneous written acknowledgment for a gift of $250 or more must state the cash amount or describe (not value) property, say whether the charity provided goods or services in return, and estimate their value. It is contemporaneous if obtained by the earlier of the filing date or the extended due date.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(i)The amount of cash and a description (but not value) of any property other than cash contributed. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(ii)Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property described in clause (i). Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(iii)A description and good faith estimate of the value of any goods or services referred to in clause (ii) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-09.

  22. A contemporaneous written acknowledgment must state the amount of cash contributed, whether the charity provided any goods or services in return, and a description and good-faith estimate of the value of any such goods or services (or a statement that they consisted solely of intangible religious benefits). It is contemporaneous if obtained by the earlier of the date the return is filed or the return's due date including extensions.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(B)(i) The amount of cash and a description (but not value) of any property other than cash contributed. (ii) Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property described in clause (i). (iii) A description and good faith estimate of the value of any goods or services referred to in clause (ii) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-09.

  23. A charity receipt (contemporaneous written acknowledgment) counts only if obtained by the earlier of the date the return is filed or the return's due date, including extensions.

    • 26 U.S.C. § 170 (LII), § 170(f)(8)(C)an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of— (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (ii) the due date (including extensions) for filing such return. Checked 2026-10-10.

  24. If total noncash contribution deductions for the year exceed $500, Form 8283 must be attached (Section A for items of $5,000 or less and publicly traded securities; Section B with a qualified appraisal for items over $5,000).

    • IRS Publication 526 (2025), Filing requirements, Form 8283If your total deduction for all noncash contributions for the year is over $500, you must complete Form 8283 and attach it to your Form 1040. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)In the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property Checked 2026-10-09.

  25. Form 8283 is required when the deduction for a noncash gift (or group of similar items) exceeds a dollar threshold set in the instructions; publicly traded securities are reported in Section A regardless of amount (no Section B appraisal); other property over the higher threshold goes in Section B. Basis need not be entered for publicly traded securities held over 12 months unless the basis election is made.

    • Instructions for Form 8283 (Rev. 12/2025), Who Must FileYou must file one or more Forms 8283 if the amount of your deduction for each noncash contribution is more than $500. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Specific Instructions, Section A, SecuritiesFor donations of publicly traded securities in any amount, you should only use Section A. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Requirement to fully complete Sections A and BFilers reporting a noncash charitable contribution of over $5,000 must fully complete Section B. Checked 2026-10-09.
    • Instructions for Form 8283 (Rev. 12/2025), Section A, Column (g)Do not complete this column for publicly traded securities held more than 12 months, unless you elect to limit your deduction cost basis. See section 170(b)(1)(C)(iii). Checked 2026-10-09.

  26. For contributions of property for which a deduction of more than $5,000 is claimed, the donor generally must obtain a qualified appraisal; the requirement does not apply to readily valued property such as cash and publicly traded securities. Other exceptions exist in the regulations (not reviewed here).

    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal Checked 2026-10-10.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(A)(ii)(I)publicly traded securities (as defined in section 6050L(a)(2)(B)), and any qualified vehicle Checked 2026-10-10.

  27. The qualified appraisal requirement is keyed to the deduction claimed, not the property's value: it applies to contributions of property for which a deduction of more than $5,000 is claimed. In applying that threshold, the property and all similar items of property donated to one or more donees are treated as one property.

    • 26 U.S.C. § 170 (LII), § 170(f)(11)(C)In the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property and attaches to the return for the taxable year in which such contribution is made such information regarding such property and such appraisal as the Secretary may require. Checked 2026-10-11.
    • 26 U.S.C. § 170 (LII), § 170(f)(11)(F)For purposes of determining thresholds under this paragraph, property and all similar items of property donated to 1 or more donees shall be treated as 1 property. Checked 2026-10-11.

  28. A qualified appraisal is not required for a contribution of nonpublicly traded stock when the deduction claimed is more than $5,000 but not more than $10,000; above $10,000 the general qualified-appraisal requirement applies. The gift is still reported in Section B of Form 8283, which covers property for which a deduction of more than $5,000 per item or group of similar items is claimed.

    • 26 C.F.R. § 1.170A-13 (LII), § 1.170A-13(c)(2)(ii)(B)(1)The contribution of nonpublicly traded stock, if the amount claimed or reported as a deduction for the charitable contribution of such stock is greater than $5,000 but does not exceed $10,000; Checked 2026-10-11.
    • Instructions for Form 8283 (IRS), Which Sections To CompleteUse Section B to report donations of property for which you claimed a deduction of more than $5,000 per item or group of similar items. Checked 2026-10-11.

  29. A "sponsoring organization" under 26 U.S.C. § 4966(d)(1) has three elements: the organization (A) is described in § 170(c), other than paragraph (1) thereof and without regard to paragraph (2)(A) thereof, (B) is not a private foundation as defined in § 509(a), and (C) maintains one or more donor advised funds. Element (A) excludes a § 170(c)(1) governmental unit, and element (C) is a separate requirement.

    • 26 U.S.C. § 4966 (LII), § 4966(d)(1)(A)-(C)(A) is described in section 170(c) (other than in paragraph (1) thereof, and without regard to paragraph (2)(A) thereof), (B) is not a private foundation (as defined in section 509(a)), and (C) maintains 1 or more donor advised funds. Checked 2026-10-12.

  30. A contribution to a DAF is also not deductible if the sponsoring organization is a type III supporting organization that is not functionally integrated (§ 170(f)(18)(A)(ii)), in addition to the war veterans' organization, fraternal society and cemetery company exclusions in § 170(c)(3)-(5).

    • 26 U.S.C. § 170 (LII), § 170(f)(18)(A)(i) described in paragraph (3), (4), or (5) of subsection (c), or (ii) a type III supporting organization (as defined in section 4943(f)(5)(A) ) which is not a functionally integrated type III supporting organization Checked 2026-10-10.

  31. The percentage limits are measured against the 'contribution base', which for individuals is AGI computed without any net operating loss carryback.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(H)the term “ contribution base ” means adjusted gross income (computed without regard to any net operating loss carryback to the taxable year under section 172 ). Checked 2026-10-09.

  32. Contributions above the AGI limits carry over for up to 5 years (15 for qualified conservation contributions) and generally keep the same percentage limit in the carryover year.

    • IRS Publication 526 (2025), Carryoversyou may be able to deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Checked 2026-10-09.
    • IRS Publication 526 (2025), CarryoversGenerally, contributions you carry over are subject to the same percentage limits in the year to which they are carried as they were in the year of the contribution. Checked 2026-10-09.

  33. Within each category, current-year contributions are deducted before carryovers, and older carryovers are used before newer ones.

    • IRS Publication 526 (2025), CarryoversFor each category of contributions, you deduct carryover contributions only after deducting all allowable contributions in that category for the current year. If you have carryovers from 2 or more prior years, use the carryover from the earlier year first. Checked 2026-10-09.

  34. Qualified conservation contributions over their AGI limit carry over for 15 succeeding years, not 5.

    • 26 U.S.C. § 170(b)(1)(E)(ii), § 170(b)(1)(E)(ii)such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time. Checked 2026-10-10.

  35. Starting in 2026, itemized charitable deductions are allowed only to the extent total contributions exceed 0.5% of the taxpayer's contribution base (AGI). Disallowed amounts may carry forward only in limited circumstances (new § 170(d)(1)(C) — not reviewed).

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Effective date note, P.L. 119-21 § 70425(c)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  36. The 0.5% floor applies to charitable contributions 'otherwise allowable (without regard to this subparagraph)' as a deduction, i.e., read here as the amount allowable after the percentage-of-AGI limits. This ordering is the reviewer's reading of the statute text; no IRS worked example was located.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)Any charitable contribution otherwise allowable (without regard to this subparagraph) as a deduction under this section shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base for the taxable year. Checked 2026-10-09.

  37. The 0.5% floor is applied first against 20%-limit capital gain gifts, then 30% capital gain gifts, then 30%-limit (other) gifts, then conservation gifts, then 50% gifts, and last against 60% cash gifts.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)(i)first, by taking into account charitable contributions to which subparagraph (D) applies to the extent thereof, Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(I)(vi)sixth, by taking into account charitable contributions to which subparagraph (G) applies to the extent thereof. Checked 2026-10-09.

  38. An amount disallowed by the 0.5% floor carries forward only from a year in which a percentage limit is also exceeded (so that an excess is carried forward anyway); in that case the floor-disallowed amount is added to the carryover. In a year where the AGI limits are not exceeded, the floor-disallowed amount is simply lost.

    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C), headingContributions disallowed by 0.5-percent floor carried forward only from years in which limitation is exceeded Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C)(i)In the case of any taxable year from which an excess is carried forward (determined without regard to this subparagraph) under any carryover rule , the applicable carryover rule shall be applied by increasing the excess Checked 2026-10-09.

  39. Under § 170(d)(1)(C), in a year from which an excess is carried forward under a carryover rule (determined without regard to the floor), that carryover is increased by the amount attributable to the contributions to which that rule applies that was disallowed by the 0.5% floor. Floor-disallowed amounts attributable to a category with no excess are not added.

    • 26 U.S.C. § 170 (LII), § 170(d)(1)(C)(i)In the case of any taxable year from which an excess is carried forward (determined without regard to this subparagraph) under any carryover rule , the applicable carryover rule shall be applied by increasing the excess determined under such applicable carryover rule for the contribution year (before the application of subparagraph (B)) by the amount attributable to the charitable contributions to which such rule applies which is not allowed as a deduction for the contribution year by reason of subsection (b)(1)(I). Checked 2026-10-09.

  40. Starting in 2026, taxpayers in the 37% bracket have itemized deductions (including charitable) reduced by 2/37 of the lesser of total itemized deductions or taxable income above the 37% bracket threshold — effectively capping the tax value of a deduction at 35 cents per dollar. The "35% cap" is a shorthand, not statutory language.

    • 26 U.S.C. § 68 (LII), § 68(a)shall be reduced by 2 ⁄ 37 of the lesser of Checked 2026-10-09.
    • 26 U.S.C. § 68 (LII), Effective date note, P.L. 119-21 § 70111(c)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  41. The § 68 reduction is 2/37 of the lesser of (1) itemized deductions or (2) taxable income, computed before § 68 and increased by itemized deductions, above the start of the 37% bracket. It is applied after every other limitation on itemized deductions (including the 0.5% floor and the AGI percentage limits).

    • 26 U.S.C. § 68 (LII), § 68(a)(2)so much of the taxable income of the taxpayer for the taxable year (determined without regard to this section and increased by such amount of itemized deductions ) as exceeds the dollar amount at which the 37 percent rate bracket under section 1 begins with respect to the taxpayer. Checked 2026-10-09.
    • 26 U.S.C. § 68 (LII), § 68(b)This section shall be applied after the application of any other limitation on the allowance of any itemized deduction. Checked 2026-10-09.

  42. Capital gain property is a capital asset that would have produced long-term capital gain if sold at fair market value on the date of the gift; for stock this generally means held more than 1 year.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(iv)the term “ capital gain property ” means, with respect to any contribution, any capital asset the sale of which at its fair market value at the time of the contribution would have resulted in gain which would have been long-term capital gain. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital Gain PropertyCapital gain property includes capital assets held more than 1 year. Checked 2026-10-09.

  43. For property held 1 year or less, the deduction is reduced by the gain that would not have been long-term, so the deduction is generally the lower of basis or fair market value.

    • 26 U.S.C. § 170 (LII), § 170(e)(1)(A)the amount of gain which would not have been long-term capital gain (determined without regard to section 1221(b)(3) ) if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution) Checked 2026-10-09.
    • IRS Publication 526 (2025), Ordinary Income Propertycapital assets (defined later, under Capital Gain Property ) held 1 year or less. Checked 2026-10-09.

  44. If donated property is worth less than its basis, the deduction is limited to fair market value and the loss is not deductible.

    • IRS Publication 526 (2025), Giving Property That Has Decreased in ValueIf you contribute property with an FMV that is less than your basis in it, your deduction is limited to its FMV. You can’t claim a deduction for the difference between the property’s basis and its FMV. Checked 2026-10-09.

  45. Publicly traded stock is valued at the average (mean) of the highest and lowest quoted selling prices on the valuation date (date of the gift).

    • IRS Publication 561 (Rev. 12/2025), Stocks and Bonds, Selling prices on valuation datethe FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. Checked 2026-10-09.
    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)the mean between the highest and lowest quoted selling prices on the valuation date is the fair market value per share or bond. Checked 2026-10-09.

  46. If there were no sales of the security on the valuation date but there were sales within a reasonable period both before and after it, fair market value is a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date.

    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)If there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the fair market value is determined by taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date. Checked 2026-10-12.

  47. When there were no sales on the valuation date, the average of the means on the nearest trading date before and the nearest trading date after is weighted inversely by the number of trading days between each selling date and the valuation date, so the nearer trading date carries more weight.

    • 26 C.F.R. § 20.2031-2 (LII), § 20.2031-2(b)(1)The average is to be weighted inversely by the respective numbers of trading days between the selling dates and the valuation date. Checked 2026-10-12.

  48. Under Rev. Rul. 78-197 (in which the IRS announced it would follow Palmer v. Commissioner, 62 T.C. 684 (1974)), the IRS treats the proceeds of a sale or redemption of donated stock as the donor's income only if the charity is legally bound, or can be compelled, to give up the shares at the time of the gift. A charity that is merely expected to sell is not enough; a charity that is bound to sell shifts the gain back to the donor (assignment of income).

  49. When you transfer shares of a stock bought at different dates or prices and do not adequately identify the lot, the shares transferred are charged against the earliest lot acquired (first-in, first-out). For shares held by a broker, an adequate identification is made if you specify the particular shares to the broker at the time of the transfer and the broker confirms that specification in writing within a reasonable time.

    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(c)(1)(i)if a taxpayer sells or transfers shares of stock in a corporation that the taxpayer purchased or acquired on different dates or at different prices and the taxpayer does not adequately identify the lot from which the stock is sold or transferred, the stock sold or transferred is charged against the earliest lot the taxpayer purchased or acquired to determine the basis and holding period of the stock Checked 2026-10-10.
    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(c)(3)(i)Where the stock is left in the custody of a broker or other agent, an adequate identification is made if— (a) At the time of the sale or transfer , the taxpayer specifies to such broker or other agent having custody of the stock the particular stock to be sold or transferred, and (b) Within a reasonable time thereafter, confirmation of such specification is set forth in a written document from such broker or other agent. Checked 2026-10-10.

  50. The average basis method (averaging the cost of identical shares) is available for shares of a regulated investment company (mutual funds) and for shares acquired after 2010 through a dividend reinvestment plan, as an exception to the lot-identification rules.

    • 26 CFR § 1.1012-1 (LII), § 1.1012-1(e)(1)a taxpayer may use the average basis method described in paragraph (e)(7) of this section to determine the cost or other basis of identical shares of stock if— (i) The taxpayer leaves shares of stock in a regulated investment company (as defined in paragraph (e)(5) of this section) or shares of stock acquired after December 31, 2010, in connection with a dividend reinvestment plan Checked 2026-10-10.

  51. For an individual, capital losses are allowed first against capital gains. Any excess loss is deductible against other income only up to $3,000 a year ($1,500 for a married individual filing a separate return). A net capital loss beyond that is carried to the succeeding taxable year, keeping its short-term or long-term character.

    • 26 U.S.C. § 1211 (LII), § 1211(b)losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus (if such losses exceed such gains) the lower of—(1) $3,000 ($1,500 in the case of a married individual filing a separate return), or (2) the excess of such losses over such gains. Checked 2026-10-11.
    • 26 U.S.C. § 1212 (LII), § 1212(b)(1)(A)-(B)the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year Checked 2026-10-11.

  52. A charitable deduction is allowed for the taxable year in which the contribution is paid. For a DAF, that is the year the donor contributes to the fund, regardless of when grants are later made to charities (grants are distributions by the sponsor, not contributions by the donor).

    • 26 U.S.C. § 170 (LII), § 170(a)(1)There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. 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.

  53. A gift counts in the year it is unconditionally delivered: a mailed check in the year it is mailed, and a gift charged to a bank credit card in the year of the charge.

  54. A charitable contribution is ordinarily made when delivery is effected. A check counts on the date mailed or delivered if it clears; a stock certificate delivered to the donor's own bank or broker (as the donor's agent) or to the issuer for transfer is a completed gift only on the date the stock is transferred on the corporation's books.

    • 26 CFR § 1.170A-1 (LII), § 1.170A-1(b)Ordinarily, a contribution is made at the time delivery is effected. The unconditional delivery or mailing of a check which subsequently clears in due course will constitute an effective contribution on the date of delivery or mailing. Checked 2026-10-10.
    • 26 CFR § 1.170A-1 (LII), § 1.170A-1(b)If the donor delivers the stock certificate to his bank or broker as the donor's agent, or to the issuing corporation or its agent, for transfer into the name of the donee , the gift is completed on the date the stock is transferred on the books of the corporation . Checked 2026-10-10.

  55. An endorsed stock certificate is delivered on mailing; if handed to the donor's agent or the issuer for transfer, the gift is not complete until transfer on the corporation's books.

    • IRS Publication 526 (2025), When To Deduct, Stock certificateA properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity’s agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn’t delivered until the date the stock is transferred on the books of the corporation. Checked 2026-10-09.

  56. 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.

  57. 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.

  58. Beginning in 2026, taxpayers who do not itemize may deduct up to $1,000 ($2,000 joint) of cash gifts to § 170(b)(1)(A) public charities, excluding gifts to supporting organizations and donor-advised funds.

    • 26 U.S.C. § 170 (LII), § 170(p)the deduction under this section shall be equal to the deduction, not in excess of 1,000 ($2,000 in the case of a joint return) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Amendment note, P.L. 119-21 § 70424(a)substituted “$1,000 ($2,000” for “$300 ($600” Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), Effective date note, P.L. 119-21 § 70424(b)shall apply to taxable years beginning after December 31, 2025 . Checked 2026-10-09.

  59. The non-itemizer deduction counts only cash contributions made during the year to § 170(b)(1)(A) organizations, not to § 509(a)(3) supporting organizations or for a new or existing donor-advised fund, and is computed without carryovers and without the 0.5% floor.

    • 26 U.S.C. § 170 (LII), § 170(p)which would be determined under this section if the only charitable contributions taken into account in determining such deduction were contributions made in cash during such taxable year (determined without regard to subsections (b)(1)(G)(ii), (b)(1)(I), and (d)(1)) Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(p)(1)-(2)to an organization described in section 509(a)(3), or (2) for the establishment of a new, or maintenance of an existing, donor advised fund Checked 2026-10-09.

  60. The § 170(p) deduction for non-itemizers (cash gifts, beginning 2026) does not apply to contributions for the establishment or maintenance of a donor-advised fund, or to § 509(a)(3) supporting organizations.

    • 26 U.S.C. § 170 (LII), § 170(p)(2)(2) for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) ). Checked 2026-10-09.

  61. For a taxpayer who does not itemize, taxable income is AGI minus the standard deduction and other listed deductions, including the § 170(p) non-itemizer charitable deduction. That deduction therefore reduces taxable income but not AGI.

    • 26 U.S.C. § 63 (LII), § 63(b)the term “ taxable income ” means adjusted gross income , minus— (1) the standard deduction , (2) the deduction for personal exemptions provided in section 151, (3) any deduction provided in section 199A, (4) the deduction provided in section 170(p), Checked 2026-10-09.

  62. Property received as a lifetime gift generally takes the donor's basis (carryover basis), so the recipient owes tax on the donor's built-in gain when selling; for determining a loss, basis is limited to fair market value at the time of the gift if lower.

    • 26 U.S.C. § 1015 (LII), § 1015(a)If the property was acquired by gift after December 31, 1920 , the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, Checked 2026-10-10.

  63. An individual who makes a transfer by gift in a calendar year must file a gift tax return for that year, unless the transfer is one the statute excepts — including a transfer that the § 2503(b) annual exclusion keeps out of the total amount of gifts for the year. So a gift to a person above the annual exclusion amount requires a gift tax return even when no gift tax is owed.

    • 26 U.S.C. § 6019 (LII), § 6019Any individual who in any calendar year makes any transfer by gift other than—(1) a transfer which under subsection (b) or (e) of section 2503 is not to be included in the total amount of gifts for such year, (2) a transfer of an interest with respect to which a deduction is allowed under section 2523, or (3) a transfer with respect to which a deduction is allowed under section 2522 but only if—(A)(i) such transfer is of the donor's entire interest in the property transferred, and (ii) no other interest in such property is or has been transferred (for less than adequate and full consideration in money or money's worth) from the donor to a person, or for a use, not described in subsection (a) or (b) of section 2522, or (B) such transfer is described in section 2522(d), shall make a return for such year with respect to the gift tax imposed by subtitle B. Checked 2026-10-11.
    • 26 U.S.C. § 2503 (LII), § 2503(b)(1)In the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year. Checked 2026-10-11.
    • Frequently asked questions on gift taxes (IRS), Annual exclusion table and "How many annual exclusions are available?"The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $19,000 in 2026, the annual exclusion applies to each gift. Checked 2026-10-11.

  64. The annual exclusion is not the only thing that decides whether a gift tax return is due. Section 6019(1) excepts from the return requirement only a transfer that section 2503(b) or (e) keeps out of the total amount of gifts, and section 2503(b)(1) applies only to gifts 'other than gifts of future interests in property', so by my reading a gift of a future interest — the form many gifts into a trust take — is not excepted by section 6019(1) at any size. Separately, gift splitting under section 2513(a)(1) applies only if both spouses signify consent under section 2513(a)(2), and 26 CFR 25.2513-2(a)(1) requires that consent to be signified on gift tax returns, so a couple who choose to split gifts file a return in order to do so.

    • 26 U.S.C. § 6019 (LII), § 6019(1)Any individual who in any calendar year makes any transfer by gift other than—(1) a transfer which under subsection (b) or (e) of section 2503 is not to be included in the total amount of gifts for such year Checked 2026-10-11.
    • 26 U.S.C. § 2503 (LII), § 2503(b)(1)In the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year. Checked 2026-10-11.
    • 26 U.S.C. § 2513 (LII), § 2513(a)(1)-(2)A gift made by one spouse to any person other than his spouse shall, for the purposes of this chapter, be considered as made one-half by him and one-half by his spouse, but only if at the time of the gift each spouse is a citizen or resident of the United States. ... Paragraph (1) shall apply only if both spouses have signified (under the regulations provided for in subsection (b)) their consent to the application of paragraph (1) in the case of all such gifts made during the calendar year by either while married to the other. Checked 2026-10-11.
    • 26 CFR § 25.2513-2 (LII), § 25.2513-2(a)(1)Consent to the application of the provisions of section 2513 with respect to a “calendar period” (as defined in § 25.2502-1(c)(1)) shall, in order to be effective, be signified by both spouses. If both spouses file gift tax returns within the time for signifying consent, it is sufficient if— Checked 2026-10-11.

  65. Two exceptions keep a gift out of the § 6019 gift tax return requirement even when it exceeds the annual exclusion. First, § 6019(2) excepts a transfer for which a deduction is allowed under § 2523, and § 2523(a) allows a deduction equal to the full value of an interest in property given to the donor's spouse; § 2523(i)(1) denies that deduction if the spouse is not a United States citizen. Second, § 6019(1) excepts a transfer that § 2503(e) keeps out of the total amount of gifts, and § 2503(e) provides that a qualified transfer — tuition paid to an educational organization, or a payment made to a provider of medical care, on behalf of an individual — is not treated as a gift at all, with no dollar limit.

    • 26 U.S.C. § 6019 (LII), § 6019(1)-(2)Any individual who in any calendar year makes any transfer by gift other than—(1) a transfer which under subsection (b) or (e) of section 2503 is not to be included in the total amount of gifts for such year, (2) a transfer of an interest with respect to which a deduction is allowed under section 2523 Checked 2026-10-11.
    • 26 U.S.C. § 2503 (LII), § 2503(e)(1)-(2)Any qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter. ... any amount paid on behalf of an individual—(A) as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or (B) to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care. Checked 2026-10-11.
    • 26 U.S.C. § 2523 (LII), § 2523(a); § 2523(i)(1)Where a donor transfers during the calendar year by gift an interest in property to a donee who at the time of the gift is the donor's spouse, there shall be allowed as a deduction in computing taxable gifts for the calendar year an amount with respect to such interest equal to its value. ... no deduction shall be allowed under this section Checked 2026-10-11.

  66. The gift tax return exception for gifts to a spouse is not automatic for every spousal gift. Section 6019(2) excepts only a transfer of an interest with respect to which a deduction is allowed under section 2523, and section 2523(b) denies that deduction where the interest transferred to the spouse will terminate or fail and the donor retains, or has transferred to someone other than the donee spouse, an interest in the same property. A gift of such a terminable interest, for example certain interests placed in trust for a spouse, therefore gets no section 2523 deduction and remains subject to the section 6019 return requirement.

    • 26 U.S.C. § 6019 (LII), § 6019(2)(2) a transfer of an interest with respect to which a deduction is allowed under section 2523 Checked 2026-10-11.
    • 26 U.S.C. § 2523 (LII), § 2523(b)(1)Where, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, such interest transferred to the spouse will terminate or fail, no deduction shall be allowed with respect to such interest—(1) if the donor retains in himself, or transfers or has transferred (for less than an adequate and full consideration in money or money's worth) to any person other than such donee spouse (or the estate of such spouse), an interest in such property, and if by reason of such retention or transfer the donor (or his heirs or assigns) or such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest transferred to the donee spouse Checked 2026-10-11.

  67. The § 2503(e) qualified transfer exclusion is limited in scope. On the education side, § 2503(e)(2)(A) reaches an amount paid as tuition to an educational organization described in § 170(b)(1)(A)(ii), and 26 CFR 25.2503-6(b)(2) states that no unlimited exclusion is permitted for amounts paid for books, supplies, dormitory fees, board, or other similar expenses which do not constitute direct tuition costs. On the medical side, § 2503(e)(2)(B) reaches a payment to a person who provides medical care as defined in § 213(d). Within those limits the exclusion carries no dollar cap, because § 2503(e)(1) provides that a qualified transfer is not treated as a transfer of property by gift at all.

    • 26 U.S.C. § 2503 (LII), § 2503(e)(1)-(2)Any qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter. ... any amount paid on behalf of an individual—(A) as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or (B) to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care. Checked 2026-10-11.
    • 26 CFR § 25.2503-6 (LII), § 25.2503-6(b)(2)No unlimited exclusion is permitted for amounts paid for books, supplies, dormitory fees, board, or other similar expenses which do not constitute direct tuition costs. Checked 2026-10-11.

  68. Under § 1015(a) the person who receives a gift of property generally takes the donor's basis, but that carryover basis is limited where the property is worth less than the donor's basis at the time of the gift: if the donor's adjusted basis is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis is that fair market value.

    • 26 U.S.C. § 1015 (LII), § 1015(a)If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, Checked 2026-10-11.
    • 26 U.S.C. § 1015 (LII), § 1015(a), loss-basis provisoexcept that if such basis (adjusted for the period before the date of the gift as provided in section 1016) is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value. Checked 2026-10-11.

  69. Federal law sets no minimum annual payout for a donor-advised fund. Sections 4966 and 4967 tax certain DAF distributions but contain no annual distribution requirement; the Code's minimum-distribution tax (§ 4942) applies to private foundations, and a DAF sponsor cannot be a private foundation. Treasury's 2023 proposed DAF regulations describe payout requirements as applicable to private foundations and supporting organizations, not DAFs.

  70. Treasury and the IRS proposed regulations under § 4966 on November 14, 2023 (REG-142338-07, 88 FR 77922). They are proposed to apply only for taxable years ending after final regulations are published. As of 2026-10-10 the Federal Register shows no final rule; the later documents are hearing notices and a correction (2024).

  71. Notice 2017-73 says the IRS is considering regulations under which a DAF distribution to a charity would NOT be a more-than-incidental benefit merely because the donor made a pledge to that charity, if (1) the sponsor makes no reference to the pledge, (2) the donor receives no other more-than-incidental benefit, and (3) the donor does not claim a § 170 deduction for the distribution. This is described as an approach under consideration, not a final rule.

    • IRS Notice 2017-73, § 4will not be considered to result in a more than incidental benefit to a Donor/Advisor under § 4967 merely because the Donor/Advisor has made a charitable pledge to the same charity (regardless of whether the charity treats the distribution as satisfying the pledge), provided that the sponsoring organization makes no reference to the existence of any individual’s pledge when making the DAF distribution. Checked 2026-10-09.
    • IRS Notice 2017-73, § 4a Donor/Advisor does not attempt to claim a charitable contribution deduction under § 170(a) with respect to the DAF distribution Checked 2026-10-09.
    • IRS Notice 2017-73, § 2this notice is intended to provide interim guidance on these specific issues and to solicit additional comments in anticipation of the issuance of further guidance. Checked 2026-10-09.

  72. Capital gain property given to most private (nonoperating) foundations is deductible only at basis, except 'qualified appreciated stock' (publicly traded stock that is capital gain property, subject to a 10% ownership limit), which keeps a fair-market-value deduction. Capital gain property gifts to these organizations are limited to 20% of AGI (or, if less, 30% of AGI minus 30%-category capital gain gifts).

    • 26 U.S.C. § 170 (LII), § 170(e)(1)(B)(ii)(ii) to or for the use of a private foundation (as defined in section 509(a) ), other than a private foundation described in subsection (b)(1)(F), Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(A)Subparagraph (B)(ii) of paragraph (1) shall not apply to any contribution of qualified appreciated stock . Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(B)for which (as of the date of the contribution) market quotations are readily available on an established securities market, and (ii) which is capital gain property Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)Donor may not contribute more than 10 percent of stock of corporation Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(D)(i)(I) 20 percent of the taxpayer’s contribution base for the taxable year, or (II) the excess of 30 percent of the taxpayer’s contribution base for the taxable year over the amount of the contributions of capital gain property to which subparagraph (C) applies. Checked 2026-10-09.
    • IRS Publication 526 (2025), Capital Gain Property, ExceptionsThe property (other than qualified appreciated stock) is contributed to certain private nonoperating foundations; Checked 2026-10-09.

  73. The 10 percent limit on qualified appreciated stock is cumulative and aggregated: stock is not qualified appreciated stock to the extent the amount contributed, increased by the aggregate amount of all prior such contributions by the donor of stock in that corporation, exceeds 10 percent in value of all of the corporation's outstanding stock; and the donor is treated as making all contributions made by any member of the donor's family.

    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)(i)In the case of any donor, the term “qualified appreciated stock” shall not include any stock of a corporation contributed by the donor in a contribution to which paragraph (1)(B)(ii) applies (determined without regard to this paragraph) to the extent that the amount of the stock so contributed (when increased by the aggregate amount of all prior such contributions by the donor of stock in such corporation) exceeds 10 percent (in value) of all of the outstanding stock of such corporation. Checked 2026-10-11.
    • 26 U.S.C. § 170 (LII), § 170(e)(5)(C)(ii)For purposes of clause (i), an individual shall be treated as making all contributions made by any member of his family (as defined in section 267(c)(4)). Checked 2026-10-11.

  74. 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.

  75. 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.

  76. Section 4967 imposes an excise tax when a donor, donor advisor, or related person advises a DAF distribution that gives such a person a more-than-incidental benefit. In Notice 2017-73 the IRS stated it is considering regulations treating DAF payment for tickets to a charity event as a more-than-incidental benefit, and treating a DAF payment of the deductible portion of a membership fee (with the donor paying the rest) the same way.

    • 26 U.S.C. § 4967 (LII), § 4967(a)(1)receiving, directly or indirectly, a more than incidental benefit as a result of such distribution, a tax equal to 125 percent of such benefit. Checked 2026-10-09.
    • IRS Notice 2017-73, § 1certain distributions from a DAF that pay for the purchase of tickets that enable a donor, donor advisor, or related person under § 4958(f)(7), to attend or participate in a charity-sponsored event result in a more than incidental benefit to such person under § 4967 Checked 2026-10-09.
    • IRS Notice 2017-73, § 3so that the sponsoring organization cannot pay the deductible portion of the membership fee without conferring more than an incidental benefit on the Checked 2026-10-09.

  77. A QCD counts toward the IRA owner's (or beneficiary's) required minimum distribution for the year.

    • IRS Publication 590-B (2025), Ch. 1, Required minimum distributions noteA qualified charitable distribution will count towards your required minimum distribution. Checked 2026-10-09.
    • IRS Notice 2007-7, A-42The amount distributed in a qualified charitable distribution is an amount distributed from the IRA for purposes of §§ 408(a)(6), 408(b)(3), and 408A(c)(5). Checked 2026-10-09.

  78. Distributing more than the RMD in one year (including through a QCD larger than the RMD) does not create a credit toward future years' RMDs.

    • IRS Publication 590-B (2025), Ch. 1, Miscellaneous Rules for Required Minimum Distributions, More than minimum receivedIf, in any year, you receive more than the required minimum amount for that year, you won't receive credit for the additional amount when determining the minimum required amounts for future years. Checked 2026-10-09.

  79. The RMD applicable age is 73 for an individual who attains age 72 after 2022 and age 73 before 2033, and 75 for an individual who attains age 74 after 2032 (generally, people born in 1960 or later). Read literally, people born in 1959 fit both clauses; the statute's text does not resolve that overlap.

    • 26 U.S.C. § 401 (LII), § 401(a)(9)(C)(v)(I) In the case of an individual who attains age 72 after December 31, 2022 , and age 73 before January 1, 2033 , the applicable age is 73. (II) In the case of an individual who attains age 74 after December 31, 2032 , the applicable age is 75. Checked 2026-10-09.
    • Instructions for Form 1040 (2025), Lines 4a and 4b, More than one distributionYou must start receiving at least a minimum amount from your traditional IRA by April 1 of the year following the year you reach age 73. Checked 2026-10-09.

  80. The 73 applicable age applies to individuals who attain age 72 after December 31, 2022 (born in 1951 or later); 75 applies to those who attain 74 after 2032. So the 73/75 RMD start ages apply to people born in 1951 or later.

    • 26 U.S.C. § 401 (LII), § 401(a)(9)(C)(v)In the case of an individual who attains age 74 after December 31, 2032, the applicable age is 75. Checked 2026-10-10.
    • 26 U.S.C. § 401 (LII), § 401(a)(9)(C)(v)(I)the applicable age is 73 Checked 2026-10-10.

  81. 2026 standard deduction: $32,200 married filing jointly, $16,100 single or married filing separately, $24,150 head of household. Additional amount for age 65+ or blind: $1,650 per qualifying person if married, $2,050 if unmarried and not a surviving spouse. (2025 under OBBBA: $31,500 / $15,750 / $23,625.)

  82. 2026 federal income tax brackets (ordinary income). Married filing jointly: 10% to $24,800; 12% to $100,800; 22% to $211,400; 24% to $403,550; 32% to $512,450; 35% to $768,700; 37% above. Single: 10% to $12,400; 12% to $50,400; 22% to $105,700; 24% to $201,775; 32% to $256,225; 35% to $640,600; 37% above.

    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Not over $24,800 10% of the taxable income Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Over $24,800 but not over $100,800 $2,480 plus 12% of the excess over $24,800 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Over $100,800 but not over $211,400 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Over $211,400 but not over $403,550 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Over $403,550 but not over $512,450 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 1 (MFJ)Over $512,450 but not over $768,700 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 3 (single)Not over $12,400 10% of the taxable income Over $12,400 but not over $50,400 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 3 (single)Over $50,400 but not over $105,700 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 3 (single)Over $105,700 but not over $201,775 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 3 (single)Over $201,775 but not over $256,225 Checked 2026-10-09.
    • Rev. Proc. 2025-32, § 3.01 Table 3 (single)Over $256,225 but not over $640,600 Checked 2026-10-09.

  83. The 3.8% net investment income tax applies to the lesser of net investment income (which includes net gain from disposing of property) or modified AGI above a threshold. Gain that is never realized is not net gain — the avoidance is an inference.

    • 26 U.S.C. § 1411 (LII), § 1411(a)(1)a tax equal to 3.8 percent of the lesser of— (A) net investment income for such taxable year, or (B) the excess (if any) of— (i) the modified adjusted gross income for such taxable year, over (ii) the threshold amount . Checked 2026-10-09.
    • 26 U.S.C. § 1411 (LII), § 1411(c)(1)(A)(iii)net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property Checked 2026-10-09.