Donor-Advised Funds Not Eligible for Tax-Free IRA Transfers

Donor-advised funds such as Vanguard Charitable are not qualified recipients for tax-free individual retirement account transfers. Many charities are eligible for the transfer that allows those 70.5 years of age or older to transfer as much as $100,000 out of their IRAs to charities tax-free. The transfer counts as the investor’s required minimum distribution. The IRS explained that not all charities are eligible for these tax-free IRA transfers due to tax law.

See Tom Herman, “IRS Forbids Using Your IRA to Give to a Donor-Advised Fund,” The Wall Street Journal (Jan. 18, 2015).

Posted by Aryane Garansi, Associate Editor, Wealth Strategies Journal

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