News for Professional Advisors

The rules for using IRAs to give to charity were complex before the One Big Beautiful Bill Act.

Let’s address five frequently asked questions we’ve been hearing from attorneys, CPAs and financial advisors.

‘I have a lot of clients who are 70½ and older. Did the rules change for Qualified Charitable Distributions?’

The short answer is no – the One Big Beautiful Bill Act did not directly change the IRS’ rules for Qualified Charitable Distributions, or QCDs. Through a QCD, a taxpayer who is older than 70 ½ can direct up to $108,000 (2025 limit) from an IRA to an eligible charity, including some types of funds at the community foundation.

‘What else should I know to best guide my clients who are 70½ and older?’

QCDs are even more tax-savvy after the One Big Beautiful Bill Act because they bypass the new 0.5% adjusted gross income floor that will apply to itemized charitable deductions starting in 2026. 

Unlike other gifts, QCDs also avoid the 35% cap on deduction value for high-income taxpayers, preserving their full tax benefit. 

Because they reduce taxable income directly without requiring itemization, QCDs provide retirees with a simple, consistent way to maximize charitable impact in a more restrictive tax environment.

‘When should I call the Community Foundation if I have a client who is a good candidate for a QCD?’

Several types of funds at the Foundation are eligible recipients of Qualified Charitable Distributions, including field-of-interest funds, designated funds and unrestricted funds. 

Although your client’s Donor Advised Fund is not a permissible QCD recipient under IRS rules, our team is happy to work with you and your client to establish another type of fund alongside an existing DAF and set in motion an overall strategy that meets both the client’s financial and estate planning goals as well as the client’s charitable goals.

‘Remind me again why IRAs are such powerful legacy gifts to charity?’

Clearly, IRAs are tax-savvy savings vehicles during a client’s lifetime because contributions to traditional IRAs may be tax-deductible. Plus, the assets inside the account grow tax-deferred, allowing returns to compound. 

Leaving an IRA to charity at death, such as to a client’s fund at the Community Foundation, is also tax-savvy. The assets avoid income tax because the charity, unlike heirs, can withdraw the funds tax-free. The assets also escape estate tax because charitable bequests are fully deductible from the taxable estate. 

Let us help your clients achieve their charitable goals.