Bill Summary
The "IRA Charitable Rollover Facilitation and Enhancement Act of 2025" is proposed legislation aimed at amending the Internal Revenue Code of 1986. The primary purpose of this bill is to allow individuals to make charitable rollovers from their individual retirement accounts (IRAs) directly to donor advised funds.
Currently, the law restricts such rollovers, preventing these funds from receiving direct contributions from IRAs, specifically those categorized under donor advised funds. By repealing this restriction, the bill enables individuals to easily direct their IRA distributions to these funds, potentially enhancing charitable giving and increasing the financial flexibility for donors who wish to support their preferred charities through donor advised funds.
The amendment would take effect for distributions made after the enactment of the legislation.
Possible Impacts
The proposed legislation, the "IRA Charitable Rollover Facilitation and Enhancement Act of 2025," would allow individuals to make charitable rollovers from individual retirement accounts (IRAs) directly to donor-advised funds (DAFs). Here are three examples of how this could affect people:
1. **Increased Charitable Giving Opportunities**: Individuals who have IRAs may be more likely to contribute to charities through donor-advised funds as a result of this legislation. By allowing tax-free rollovers to DAFs, it encourages individuals to support their favorite causes with larger contributions, potentially increasing the overall amount of charitable giving in communities.
2. **Tax Benefits for Donors**: The legislation provides a tax incentive for individuals to donate to DAFs by permitting them to use pre-tax dollars from their IRAs. This could lead to significant tax savings for retirees who might otherwise be required to pay taxes on IRA withdrawals. As a result, more retirees may choose to give to charities instead of withdrawing their funds for personal use, positively impacting both their financial situation and charitable organizations.
3. **Streamlined Charity Management**: Donor-advised funds allow for more strategic philanthropy, as individuals can manage their charitable donations over time. This legislation could encourage people to establish DAFs, where they can make contributions and later decide which charities to support. This flexibility can lead to greater engagement with philanthropic efforts, as donors can take the time to research and choose their causes without immediate financial pressure.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2891 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2891
To amend the Internal Revenue Code of 1986 to allow charitable
rollovers from individual retirement accounts to donor advised funds.
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IN THE HOUSE OF REPRESENTATIVES
April 10, 2025
Mr. Smith of Nebraska (for himself, Mr. Panetta, Mr. Buchanan, Mr.
Kelly of Pennsylvania, Ms. Sewell, Mr. Suozzi, Mr. Beyer, Mr. Thompson
of California, Mr. Moran, and Mr. Hern of Oklahoma) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow charitable
rollovers from individual retirement accounts to donor advised funds.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``IRA Charitable Rollover Facilitation
and Enhancement Act of 2025''.
SEC. 2. REPEAL OF RESTRICTION ON CHARITABLE ROLLOVERS FROM INDIVIDUAL
RETIREMENT ACCOUNTS TO DONOR ADVISED FUNDS.
(a) In General.--Section 408(d)(8)(B)(i) of the Internal Revenue
Code of 1986 is amended by striking ``or any fund or account described
in section 4966(d)(2)''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions after the date of the enactment of this Act.
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