H.R. 2891: IRA Charitable Rollover Facilitation and Enhancement Act of 2025

This bill, known as the IRA Charitable Rollover Facilitation and Enhancement Act of 2025, aims to change the rules regarding charitable giving from individual retirement accounts (IRAs). The main provisions of the bill include:

Key Provisions

• Modification of Charitable Rollover Rules: The bill proposes to repeal the current restriction that prevents individuals from directly rolling over funds from their IRAs to donor advised funds (DAFs). Previously, individuals could make charitable contributions from their IRAs to qualifying charities but not to DAFs, which are specialized accounts used for charitable giving.
• New Eligibility: With the passing of this bill, individuals will be able to make tax-free distributions from their IRAs directly to DAFs. This aligns the treatment of DAFs with other charitable organizations regarding IRA rollovers.
• Implementation Timeline: The changes outlined in the bill are set to take effect for distributions made after the bill is enacted.

Impact on Charitable Giving

The bill is intended to facilitate greater charitable contributions by allowing individuals to use their retirement savings more flexibly. By enabling direct transfers to donor advised funds, it aims to make it simpler for donors to manage their charitable giving while potentially maximizing their tax benefits.

Donor advised funds are investment accounts established at a public charity that allow donors to make charitable contributions, receive an immediate tax deduction, and then recommend grants to charities over time. This bill encourages individuals with IRAs to consider using DAFs as a way to manage their charitable activities, potentially increasing donations to various causes supported by those funds.

Relevant Companies

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