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Charitable Giving and Roth Conversions: How to Coordinate Them

Josh Rendler, CFP®

Creator of Motion Retirement

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

Can a charitable gift offset the tax on a Roth conversion?

Partly, mostly if you itemize. A gift you deduct can offset some of the conversion's income tax, within set limits. One example is stock given to a donor-advised fund (a giving account at a charity that holds your gifts until you pick where they go). It does not lower your AGI (your total income minus a few set subtractions, the number many tax rules start from), so it doesn't undo the conversion's effect on Medicare or Social Security. A QCD (money sent straight from your IRA to a charity at 70½ or older, not taxed as income, up to a yearly limit) can't be applied against conversion income. It can keep RMD (the least you must take out of a regular IRA each year once you reach a set age) dollars out of income, which leaves room for the conversion.

  • A Roth conversion is taxable income (the part of your income that tax rates are actually charged on). A QCD can't be applied against it. But a QCD keeps RMD dollars out of income, which leaves more room for a conversion.
  • A gift you itemize can offset conversion income tax. Cash to a public charity (a charity like a church, school or hospital that gets the best tax treatment for gifts) is capped at 60% of AGI and stock you've held more than a year at 30%. From 2026, only itemized gifts above a 0.5% floor (a 2026 rule: the first sliver of your charity gifts, half a percent of income, is not deductible) count.
  • A charity deduction lowers taxable income, not AGI. So it doesn't shrink the conversion's effect on Medicare IRMAA (an extra Medicare charge you pay when your income is above a set line), Social Security tax or the senior deduction (an extra deduction for people 65 and older from 2025 through 2028).
  • Each year's conversion usually shows up in Medicare premiums two years later. A conversion is not a reason Social Security accepts for an IRMAA appeal.
  • Converting IRA money you expect to leave to charity means paying income tax a charity would never owe.
Jump to a question

A QCD and a charity deduction work on different lines of your tax return. A QCD: Left out of income before AGI, so it can't also be deducted.12. A gift you itemize (costs like charity gifts you list one by one on your return instead of the flat amount): Itemized, so it lowers taxable income but not AGI.3456. That one difference decides what each can do in a conversion year.

This page is for retirees who move IRA money to a Roth IRA and also give to charity. The two plans touch in three places:

  • A conversion raises income, and a deduction can offset part of it.
  • QCDs change how much room you have for a conversion.
  • Money you expect to leave to charity is often the least useful money to convert.

Anything marked “strategy” is a planning idea, not a rule of law. Whether it fits depends on your situation.

Is a Roth conversion taxable income?

Yes.

A conversion from a traditional IRA to a Roth IRA is taxed as income.7 There is no 10% early-withdrawal penalty on the conversion itself.7 Taking the converted money out of the Roth within five years can bring that penalty back.8 An exception may still apply.8 An RMD can’t be converted.9 So in a year you owe an RMD, it has to come out before you convert.9

The conversion also raises your AGI. That can raise three other things:

  • The tax on your Social Security. Half your benefits plus other income, including tax-exempt interest.1011
  • Medicare IRMAA, usually two years later. AGI plus tax-exempt interest, usually from two years earlier.121314
  • The cut to the senior deduction. An extra $6,000 per person 65 or older, 2025 through 2028, itemizing or not.151617

See how giving fits with retirement taxes.

Can a QCD offset Roth conversion income?

No, not directly. A QCD has to be paid a certain way.

The firm that holds your IRA must pay the charity directly.1819 Money paid to you first and then given away is not a QCD.18 A check your IRA firm issues to the charity still counts if you deliver it yourself.20 The IRS hasn’t said whether a check you write on an IRA checkbook counts.20

A conversion goes to your Roth IRA, not to a charity. So it can’t be a QCD. A QCD isn’t a deduction you could use against the conversion either.

What a QCD can do is keep other IRA money out of AGI.

A QCD counts toward your required minimum distribution (RMD) for the year.21 Taking out more than your RMD doesn’t earn credit toward a later year’s RMD.22

Say you’re past RMD age and give part of your RMD by QCD. That part never counts as income. It frees room under whatever level you’re converting up to. That could be a tax bracket, an IRMAA line, or the senior deduction cut.

Related video Roth Conversions At Age 60, 65 OR 70? (Avoid This Costly Tax Mistake)

Can a charitable deduction offset Roth conversion income?

Yes, partly, and mostly if you itemize. A deduction lowers taxable income, and a conversion is taxable income. So a large itemized gift in a conversion year offsets part of the tax. One word comes up in the rule below: the standard deduction (the flat amount most people can subtract from income without listing costs).

To deduct a gift the usual way, you must itemize on Schedule A.3 You get either your itemized deductions or the standard deduction, not both.4 Itemized deductions lower your taxable income, but not your AGI.65 So they don’t lower measures built on AGI, like the income used for IRMAA.5

There is also a smaller deduction for people who don’t itemize. Three more words come up in the rule below: a supporting organization (a charity set up to help one or more specific public charities), property (anything you own other than cash, such as stock or a fund, not just a house), and carryovers (the part of a gift too big to deduct this year, saved for up to five later years).

From 2026, if you don’t itemize, you can deduct up to $1,00024 of cash gifts, or $2,00024 on a joint return.24 The cash must go to a public charity, or one of a few special foundations, not a donor-advised fund or a supporting organization.2526 Gifts of stock or other property don’t count, and neither do carryovers from earlier years.25 It lowers your taxable income, but not your AGI.27

Itemizing only helps if your total beats the standard deduction.

In 2026, the standard deduction is $32,20028 for a married couple filing jointly and $16,10028 for a single filer. Each married spouse 65 or older adds $1,65028. A single person 65 or older adds $2,05028, unless they are a surviving spouse.

So the hurdle depends on what your giving looks like in the other years. Cash paid straight to a public charity earns that small deduction, and itemizing gives it up. Cash into a donor-advised fund never earned it, so there is nothing to give up.

Three limits then cap what the gift is worth. The first is the yearly cap on the gift itself. It is set as a share of your AGI, and the share depends on what you give and who gets it. See the yearly caps.

The conversion raises AGI, so it raises those caps too. The second limit is the 0.5% floor.

From 2026, if you itemize, your gifts count only above 0.5% of your AGI.29 By my reading, the floor comes off after the yearly AGI caps.30 It comes off in a set order, starting with gifts under the 20% cap and ending with cash to public charities.31

A bigger AGI from the conversion also means a bigger floor. The third limit applies only at the top rate.

From 2026, itemized deductions are trimmed if your income reaches the 37% bracket.32 The trim is 2/37 of the smaller of two amounts: those deductions, or your income above where that bracket starts.32 That income is counted before itemized deductions come off.33 The trim comes after every other limit, so each dollar fully hit saves about 35 cents.3332

Does a donor-advised fund gift lower the conversion’s effect on IRMAA?

No. A gift to a donor-advised fund is an itemized deduction: Itemized, so it lowers taxable income but not AGI.3456. And IRMAA uses income measured before those come off: AGI plus tax-exempt interest, usually from two years earlier.121314. So the conversion counts in full for IRMAA whether or not you give.

The same is true for the tax on Social Security and the senior deduction cut. Both are measured from income built on AGI, as the rules above show.

Some say a donor-advised fund gift makes a conversion “look smaller.” It does make taxable income smaller. But AGI stays where the conversion put it.

Related video The IRS Quietly Gave You a Roth Conversion Gift—Most Retirees Miss It

How large can a gift get before it stops offsetting the conversion?

It stops adding a deduction this year at the AGI cap in the rule above. Say you give both cash and stock the same year. Then the stock cap can end up below 30%, because the cash uses up part of the room. 34 Anything above the cap can carry over.

Gifts over a yearly cap can be deducted in the next five years, but not after that.35 In those years, they generally keep the same cap.35 Within each kind of gift, new gifts are used before carryovers, and older carryovers before newer ones.36 Qualified conservation gifts get 15 years instead of five.37

So a very large gift in a small conversion year can push part of the deduction into later years. Those years may have less income to use it against.

That’s why many people size the conversion and the gift together. The conversion sets AGI. AGI sets the cap. The cap limits this year’s deduction.

Do Roth conversions raise IRMAA every year you convert?

Only if the conversion crosses a tier line. Each year’s conversion adds to that year’s income. The premium changes only when that income crosses a line. 38

IRMAA uses your AGI plus tax-exempt interest.12 It generally uses the return from two years earlier, so 2026 premiums use 2024 returns.1312 Each person on Medicare whose income is above the line for their filing status pays it.14

So a 2026 conversion usually affects 2028 premiums. The 2026 surcharge is set from 2024 income: Starts above $218,000 joint or $109,000 single in 2026.3839. The full table is at QCDs and IRMAA.

The 2028 lines aren’t published yet. The first joint line has gone up every year since 2023. 39 So the 2028 lines are likely to be higher, by my reading.

The premium doesn’t rise slowly inside a range. A conversion that keeps you under a tier line doesn’t raise the premium. One that crosses a line does. 38

Nor can you appeal it as a one-time event.

After certain life events, such as a spouse’s death, you can ask Social Security to use a more recent year’s income.40 The event must lower your income enough to lower or end your IRMAA.40 One-time income, such as a Roth conversion or a capital gain, doesn’t count as such an event.41

That’s why some retirees size conversions to the nearest tier line and use QCDs to make room under it. See QCDs and IRMAA.

What are the options before and after 70½?

Before 70½, a QCD isn’t available: 70½ or older on the day the money leaves the IRA.42. So a deduction is the only charity tool that cuts this year’s tax. Naming a charity on the IRA still helps later. After 70½, both tools are open.

Tool Before 70½ 70½ and up Lowers AGI?
Gift of cash or stock you itemize Yes Yes No — Itemized, so it lowers taxable income but not AGI.3456
Several years of gifts at once to a donor-advised fund Yes Yes No
QCD from an IRA No Yes — 70½ or older on the day the money leaves the IRA.42 Yes — Left out of income before AGI, so it can't also be deducted.12
Charity named on the IRA at death Yes Yes Not your AGI

Is a conversion year a good year to bunch gifts?

It can be, for retirees who usually take the standard deduction. Bunching (giving several years of gifts in one year so they are big enough to deduct) means giving several years of gifts in one year. A conversion raises income. So a bunched gift that clears the standard deduction can be used against income taxed at the conversion’s rate.

Whether it fits depends on how much you give and whether you own stock that has gone up. It also depends on how the AGI caps and the 0.5% floor work out at your income.

Worked example · tax year 2026Bunching four years of giving into a conversion year
Assumptions
  • Married filing jointly; both spouses are 71, so no RMDs are required yet. No tax-exempt interest.
  • AGI before the conversion is $120,000. They convert $100,000 of a traditional IRA with no after-tax basis, so AGI becomes $220,000.
  • They usually give $10,000 a year. In 2026 they give stock worth $40,000 (four years of giving), with a $10,000 cost basis and held more than a year, to a donor-advised fund.
  • Other itemized deductions total $20,000.
  • The deduction is valued at the 2026 federal bracket for this taxable income (shown below): $180,900 without itemizing ($220,000 − $35,500 − $3,600) and $157,500 with it ($220,000 − $58,900 − $3,600), both in the same bracket. Social Security taxation is left out to isolate the gift's effect.
  • Both are 65 or older. At $220,000 of AGI each senior deduction is cut to $1,800, or $3,600 together. The gift doesn't change AGI, so it's the same both ways.
Step Calculation Amount
1. AGI with the conversion $120,000 + $100,000 $220,000
2. 30% cap for stock $220,000 × 30% $66,000
3. Stock given (within the cap) Market value $40,000
4. 0.5% floor $220,000 × 0.5% $1,100
5. Charity deduction allowed $40,000 − $1,100 $38,900
6. Total itemized deductions $38,900 + $20,000 $58,900
7. Standard deduction (both 65+) $32,20028 + 2 × $1,65028 $35,500
8. Extra deduction from itemizing $58,900 − $35,500 $23,400
9. Federal tax saved by the gift this year $23,400 × 22%43 $5,148
10. Gain never taxed on the shares $40,000 − $10,000 $30,000
11. Income for IRMAA, with or without the gift AGI plus $0 tax-free interest $220,000

Step 8 measures the gift against the standard deduction alone. The couple gives only stock, and only to the fund, so they have no non-itemizer cash deduction to give up. This plan turns four years of giving into $23,400 of extra deduction. The shares’ $30,000 gain is never taxed. 44

In a standard-deduction year, giving $10,000 in cash straight to a public charity would earn a deduction instead. The limit: Up to $1,000 ($2,000 joint) of cash to public charities, from 2026, if you don't itemize.24252627. That is the rule stated above. A couple giving cash in each of the four years could claim it in each of those years. By my reading of step 8, that still comes to less than the bunched gift’s extra deduction. But it is not nothing. Cash sent to the fund would earn none.

Line 11 is easy to miss. The gift doesn’t change IRMAA income. At $220,000, this couple is above the 2026 first joint tier line of $218,00038. If the 2028 line ends up near there, the conversion decides their 2028 tier, not the gift.

Should you convert or fund a donor-advised fund with this year’s room?

It depends on which one the year suits better, and many retirees do some of both. Both use the same year’s income. The conversion adds to it. A gift you itemize lowers taxable income, not AGI, within the AGI caps: Itemized, so it lowers taxable income but not AGI.3456.

The deciding factors are usually these:

  • Your tax rate now versus later.
  • How close you are to an IRMAA line. A charitable deduction doesn’t help there: AGI plus tax-exempt interest, usually from two years earlier.121314. Only something that lowers income itself helps, such as a smaller conversion or a QCD.
  • Whether you own stock that has gone up.
  • How many years of giving you’re comfortable giving at once.

I look at the two as one decision for the year, not two separate ones.

Does it make sense to convert IRA money you’ll leave to charity?

In many cases, no. Say you expect part of your IRA to go to charity when you die. Converting that part means paying income tax now.

A charity is exempt from federal income tax.4546 By my reading, IRA money it inherits isn’t taxable business income, so it owes no income tax on it.46

Pre-tax IRA money gets no step-up when you die.47 Whoever inherits it pays income tax when they take it out.47 It’s taxed as ordinary income, no matter what the investments gained.48

When the heir is a charity, no income tax is owed on that money. The gift also lowers the estate. Two kinds of trust come up in the rule below: a CRAT (a charity trust that pays you the same dollar amount every year) and a CRUT (a charity trust that pays you a set percent of its value, so payments go up and down).

Gifts to charity at death are deducted from the estate for federal estate tax, with no dollar limit.49 A gift of only what’s left after others are paid qualifies only through a CRAT, CRUT or pooled income fund.49

Another option is a charitable remainder trust named on the IRA. It can pay income to a surviving spouse and leave the rest to charity.

A charitable remainder trust pays no income tax, so it can sell what you gave without tax at that moment.51 Business-type income inside it is taxed at 100%.51 That includes part of the income from an asset with a loan on it, like a mortgaged building.52 The trust can’t be undone, and it files Form 5227 every year.53

Payments from a charitable remainder trust are taxed in four layers.54 First comes ordinary income, then capital gain, then other income such as tax-free income, then a tax-free return of what went in.54

See charitable trusts. That is an estate planning choice worth working through with your attorney.

Common mistakes

  • Expecting a QCD to cancel conversion income. It can’t. Left out of income before AGI, so it can't also be deducted.12
  • Trying to convert the RMD. The RMD comes out first, as the rule at the top of this page says.
  • Expecting the deduction to fix IRMAA. Itemized, so it lowers taxable income but not AGI.3456
  • Ignoring the 30% cap on stock. A large stock gift in a small conversion year may carry over instead. Carries forward up to five years, under the same cap.353736
  • Converting money meant for charity. By my reading, the charity owes no income tax on it.4645

Sources (54)

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  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. A conversion (rollover) from a traditional IRA to a Roth IRA is included in gross income to the extent it would have been includible had it not been rolled over; the 10% early-distribution tax of § 72(t) does not apply.

    • 26 U.S.C. § 408A (LII), § 408A(d)(3)(A)(i)-(ii)there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution , (ii) section 72(t) shall not apply, Checked 2026-10-09.

  8. If a Roth IRA distribution within the 5-taxable-year period beginning with the year of a conversion is allocable to the converted amount, § 72(t) (the 10% additional tax, with its exceptions) is applied as if that portion were includible in income, limited to the taxable amount converted.

    • 26 U.S.C. § 408A (LII), § 408A(d)(3)(F)(i)such distribution is made within the 5-taxable year period beginning with the taxable year Checked 2026-10-10.
    • 26 U.S.C. § 408A (LII), § 408A(d)(3)(F)(i)then section 72(t) shall be applied as if such portion were includible in gross income. Checked 2026-10-10.

  9. Amounts that must be distributed from a traditional IRA for a year under the RMD rules cannot be converted to a Roth IRA (and are not eligible for rollover), so in an RMD year the RMD has to come out before any of the IRA can be converted.

    • IRS Publication 590-A (2025), Converting From Any Traditional IRA Into a Roth IRA, Required distributionsYou can’t convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 73) under the required distribution rules (discussed in Pub. 590-B). Checked 2026-10-10.
    • IRS Publication 590-A (2025), Rollover From One IRA Into Another, Required distributionsAmounts that must be distributed during a particular year under the required distribution rules (discussed in Pub. 590-B) aren’t eligible for rollover treatment. Checked 2026-10-10.

  10. 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.

  11. 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.

  12. 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).

  13. 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.

  14. 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.

  15. For 2025 through 2028, each taxpayer (and spouse on a joint return) age 65+ by year end gets an extra $6,000 deduction, available whether or not they itemize, reduced by 6% of modified AGI above $75,000 ($150,000 joint). Married couples must file jointly; a valid SSN is required.

    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(i)In the case of a taxable year beginning before January 1, 2029 , there shall be allowed a deduction in an amount equal to $6,000 for each qualified individual Checked 2026-10-09.
    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(iii)(I)shall be reduced (but not below zero) by 6 percent of so much of the taxpayer’s modified adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return). Checked 2026-10-09.
    • Instructions for Form 1040 (2025), Schedule 1-A, Part VYou can claim this deduction whether you claim the standard deduction or itemize deductions Checked 2026-10-09.
    • Instructions for Form 1040 (2025), Schedule 1-A, Part VIf you are married, you must file a joint return with your spouse to claim this deduction. Checked 2026-10-09.

  16. On Schedule 1-A, the 6% phaseout of the senior deduction is computed once from modified AGI and subtracted from each qualifying spouse's $6,000 separately; the two reduced amounts are then added. On a joint return, each $1,000 of MAGI above the threshold therefore reduces the couple's combined senior deduction by $120.

  17. The senior deduction's 'qualified individual' is the taxpayer (and, on a joint return, the spouse) who has attained age 65 before the close of the taxable year; the qualified individual's Social Security number must be on the return; married individuals must file jointly; the phaseout uses AGI increased only by foreign-income exclusions (§§ 911, 931, 933), so income excluded from gross income, such as a QCD, does not count.

    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(ii)the taxpayer, if the taxpayer has attained age 65 before the close of the taxable year, and (II) in the case of a joint return, the taxpayer’s spouse, if such spouse has attained age 65 before the close of the taxable year. Checked 2026-10-10.
    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(iii)(II)the term “ modified adjusted gross income ” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. Checked 2026-10-10.
    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(iv)(I)Clause (i) shall not apply with respect to a qualified individual unless the taxpayer includes such qualified individual ’s social security number on the return of tax for the taxable year. Checked 2026-10-10.
    • 26 U.S.C. § 151 (LII), § 151(d)(5)(C)(v)this subparagraph shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. Checked 2026-10-10.

  18. A QCD is a distribution from an IRA made directly by the IRA trustee to an eligible charity. The statute and IRS guidance say nothing about the payment method (check, wire, electronic transfer) beyond that the trustee must make it directly to the charity. Money paid to the owner first is not paid directly to the charity.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B)(i)means any distribution from an individual retirement plan (other than a plan described in subsection (k) or (p))— (i) which is made directly by the trustee to an organization described in section 170(b)(1)(A) Checked 2026-10-10.
    • IRS Publication 590-B (2025), Ch. 2, Qualified charitable distributions (QCDs)A QCD is generally a nontaxable distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions. Checked 2026-10-10.

  19. The IRA trustee must pay the charity directly; a distribution paid to the owner and then donated is not a QCD. (Whether a check the owner writes from an IRA checkbook counts is not addressed by this source — see rw-qb-check-from-ira-a41.)

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B)(i)which is made directly by the trustee to an organization described in section 170(b)(1)(A) Checked 2026-10-09.
    • IRS Notice 2007-7, A-41will be considered a direct payment by the IRA trustee to the charitable organization for purposes of § 408(d)(8)(B)(i). Checked 2026-10-09.

  20. IRS Notice 2007-7 treats a check from an IRA, made payable to an eligible charity and delivered by the IRA owner, as a direct payment by the IRA trustee. The notice does not say whether this covers a check the owner writes personally on an IRA checkbook, and no fetched IRS text addresses owner-written IRA checkbook checks.

    • IRS Notice 2007-7, Q-41/A-41If a check from an IRA is made payable to a charitable organization described in § 408(d)(8) and delivered by the IRA owner to the charitable organization, the payment to the charitable organization will be considered a direct payment by the IRA trustee to the charitable organization for purposes of § 408(d)(8)(B)(i). Checked 2026-10-10.

  21. 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.

  22. 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.

  23. QCDs count for the calendar year in which the trustee makes the distribution (exclusion is per taxable year). Under the RMD rules, the first amounts distributed in a year are treated as the RMD, so a taxable withdrawal taken earlier in the year satisfies the RMD and cannot be converted into a QCD by a later charitable distribution.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(A)made during any taxable year which does not exceed Checked 2026-10-09.
    • 26 CFR § 1.402(c)-2 (LII), § 1.402(c)-2(f)(2)(i) examplethe first $5,000 distributed will be treated as the required minimum distribution and will not be an eligible rollover distribution Checked 2026-10-09.

  24. 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.

  25. 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.

  26. 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.

  27. 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.

  28. 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.)

  29. 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.

  30. 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.

  31. 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.

  32. 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.

  33. 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.

  34. IRS Publication 526 Worksheet 2 applies the AGI limits in order: cash to 50% limit organizations up to 60% of AGI; other noncash gifts to them up to 50% of AGI less the deductible cash; capital gain property deducted at FMV up to the smallest of the gift, 50% of AGI less the 50% and 60% gifts, or 30% of AGI. Its example: AGI $50,000, $2,000 cash and land worth $28,000 to a place of worship gives $2,000 + $15,000 deducted and $13,000 carried over. A carryover is deducted after the current-year gifts in its category.

    • IRS Publication 526, Worksheet 2, line 16Subtract line 13 from line 15 Checked 2026-10-10.
    • IRS Publication 526, Worksheet 2, lines 26-3026. Multiply line 11 by 0.5 26 27. Add lines 9 and 10 27 28. Subtract line 27 from line 26 28 29. Multiply line 11 by 0.3 29 30. Deductible amount. Enter the smallest of line 8, 28, or 29 Checked 2026-10-10.
    • IRS Publication 526, Worksheet 2 exampleYour deduction for the land is limited to $15,000 (30% × $50,000). The unused part of the contribution ($13,000) can be carried over. For this year, your deduction is limited to $17,000 ($2,000 + $15,000). Checked 2026-10-10.
    • IRS Publication 526, CarryoversFor each category of contributions, you deduct carryover contributions only after deducting all allowable contributions in that category for the current year. Checked 2026-10-10.

  35. 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.

  36. 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.

  37. 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.

  38. 2026 IRMAA (based generally on 2024 MAGI): the first tier begins above $218,000 MAGI for married filing jointly and above $109,000 for single, head of household, or qualifying surviving spouse. Joint tiers: >$218,000–$274,000; >$274,000–$342,000; >$342,000–$410,000; >$410,000–<$750,000; ≥$750,000. Single tiers: >$109,000–$137,000; >$137,000–$171,000; >$171,000–$205,000; >$205,000–<$500,000; ≥$500,000. Total 2026 Part B premium by tier: $284.10, $405.80, $527.50, $649.20, $689.90 per month; Part D IRMAA $14.50, $37.50, $60.40, $83.30, $91.00 plus plan premium. Tiers are step functions: one dollar over a boundary applies the full tier.

    • SSA POMS HI 01101.010 (12/02/2025), B. MAGI thresholdsMarried, filing jointly $194,000 $206,000 $212,000 $218,000 All other filing statuses $97,000 $103,000 $106,000 $109,000 Checked 2026-10-09.
    • SSA POMS HI 01101.020 (12/02/2025), B.2 (2026, married filing jointly)More than $218,000 but less than or equal to $274,000 $284.10 $14.50 + Plan premium More than $274,000 but less than or equal to $342,000 $405.80 $37.50 + Plan premium More than $342,000 but less than or equal to $410,000 $527.50 $60.40 + Plan premium More than $410,000 but less than $750,000 $649.20 $83.30 + Plan premium Greater than or equal to $750,000 $689.90 $91.00 + Plan Premium Checked 2026-10-09.
    • SSA POMS HI 01101.020 (12/02/2025), B.1 (2026, single/HOH/QSS)More than $109,000 but less than or equal to $137,000 $284.10 $14.50 + Plan premium More than $137,000 but less than or equal to $171,000 $405.80 $37.50 + Plan premium More than $171,000 but less than or equal to $205,000 $527.50 $60.40 + Plan premium More than $205,000 but less than $500,000 $649.20 $83.30 + Plan Premium Greater than or equal to $500,000 $689.90 $91.00 + Plan Premium Checked 2026-10-09.

  39. SSA's table of IRMAA base MAGI thresholds shows the first joint threshold rising each year from 2023 to 2026: $194,000 (2023), $206,000 (2024), $212,000 (2025), $218,000 (2026); single/other $97,000, $103,000, $106,000, $109,000. Whether later years keep rising is not stated (inference only).

    • SSA POMS HI 01101.010, B, table column headingsIRS Filing Status 2023 2024 2025 2026 Checked 2026-10-10.
    • SSA POMS HI 01101.010, B, table rowsMarried, filing jointly $194,000 $206,000 $212,000 $218,000 Checked 2026-10-10.

  40. Death of a spouse is one of eight life-changing events (LCEs) for IRMAA. A beneficiary who has had an LCE that significantly reduces MAGI (a reduction that lowers or eliminates IRMAA) may ask SSA for a new initial determination using a more recent tax year; the request can be made any time after the event. Form SSA-44 is the optional form for reporting it. The determination applies only to the beneficiary who reports it. Ordinarily the new determination is not retroactive to a prior premium year, unless the event occurred in October-December of that prior year and the request is received by March 31 of the current premium year. SSA needs proof of death and tax information or an estimate of MAGI and filing status for the year to be used.

    • SSA POMS HI 01120.005 Life Changing Events, C. List of life changing eventsA Life-Changing Event (LCE) can be one or more of the following eight events: 1. Death of spouse ( HI 01120.010 ); 2. Marriage ( HI 01120.015 ); 3. Divorce or annulment ( HI 01120.020 ); 4. Work reduction ( HI 01120.025 ;) 5. Work stoppage ( HI 01120.030 ); 6. Loss of income-producing property ( HI 01120.035 ); 7. Loss of employer pension ( HI 01120.040 ); or 8. Receipt of settlement payment from a current or former employer ( HI 01120.043 ). Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, A. Description of life changing eventsA “significant” reduction in MAGI is a reduction that decreases or eliminates the income-related monthly adjustment amount (IRMAA) for a specific tax year. A beneficiary who has experienced an LCE causing a significant reduction in MAGI may request us to make a new initial determination using a more recent tax year, than the tax year used previously to impose IRMAA. Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, A, NOTEBeneficiaries may use the optional Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event) to report a life-changing event with a significant reduction in income. Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, B.1A beneficiary may request a new initial determination any time after an LCE and a significant reduction in MAGI has occurred. The LCE may have occurred at any time in the past. Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, A, NOTEA report of an LCE with a significant reduction in MAGI applies only to the beneficiary reporting. Checked 2026-10-10.
    • SSA POMS HI 01120.010 Life Changing Event (LCE) – Death of Spouse, A. PolicyThe death of a spouse is an LCE that could result in a “significant” reduction in MAGI and a change in a tax filing status for a beneficiary. Checked 2026-10-10.
    • SSA POMS HI 01120.010 Life Changing Event (LCE) – Death of Spouse, B. What Evidence is Needed to Support the ChangeIf the spouse of a beneficiary has died, SSA will need proof of the death and tax information for the tax year to be used. Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, B.2Ordinarily, we do not make a determination retroactive to a prior premium year on a new initial determination, unless the LCE causing the reduction occurs in the last three calendar months of the immediately prior premium year and we receive the request for a new initial determination for the preceding premium year by March 31, of the current premium year. Checked 2026-10-10.
    • SSA POMS HI 01120.010 Life Changing Event (LCE) – Death of Spouse, BAn estimate of MAGI and tax filing status for the tax year they are requesting SSA to use (current premium year or PY-1), or Checked 2026-10-10.

  41. SSA's list of IRMAA life-changing events is exclusive. One-time income that raises MAGI, including capital gains from the sale of property and the conversion of an IRA, is a non-qualifying event, so a Roth conversion or a large capital gain does not by itself support a new initial determination.

    • SSA POMS HI 01120.005 Life Changing Events, D. Examples of non-qualifying life-changing eventsOur list of LCEs for IRMAA purposes is exclusive. Checked 2026-10-10.
    • SSA POMS HI 01120.005 Life Changing Events, D. Examples of non-qualifying life-changing eventsSome examples of one-time income that cause an increase and are non-qualifying events (NQEs) include: • Capital gains from the sale of property; • Lottery winnings; • Casino winnings; • Conversion of an IRA; or • Cashing bonds. Checked 2026-10-10.

  42. The IRA owner (or beneficiary) must be at least age 70½ on the date the distribution is made. This age was not changed when the RMD starting age rose to 73 (and later 75); QCD eligibility can begin years before RMDs are required.

    • 26 U.S.C. § 408 (LII), § 408(d)(8)(B)(ii)which is made on or after the date that the individual for whose benefit the plan is maintained has attained age 70½ Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 2, Qualified charitable distributions (QCDs)You must be at least age 70½ when the distribution is made. Checked 2026-10-09.
    • IRS Publication 590-B (2025), Ch. 1, Required beginning date FAQYou must begin receiving required minimum distributions by April 1 of the year following the year you reach age 73. Checked 2026-10-09.

  43. 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.

  44. Long-term appreciated capital-gain property given to a public charity is generally deductible at fair market value, limited to 30% of AGI; cash gifts to public charities are limited to 60% of AGI. Excess carries forward up to 5 years. Property held 1 year or less (ordinary income property) is limited to basis because the deduction is reduced by gain that would not be long-term.

    • 26 U.S.C. § 170 (LII), § 170(b)(1)(C)(i)shall not exceed 30 percent of the taxpayer’s contribution base for such year. Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(b)(1)(G)(i)(I) 60 percent of the taxpayer’s contribution base for the taxable year Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(d)(1)(A)paid in each of the 5 succeeding taxable years in order of time Checked 2026-10-09.
    • 26 U.S.C. § 170 (LII), § 170(e)(1)(A)the amount of gain which would not have been long-term capital gain 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.

  45. 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.

  46. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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