November: Making a Required Minimum Distribution to a Donor-Advised Fund

Question

Can a donor make a required minimum distribution from an inherited IRA to a donor-advised fund?

Answer from Staff Counsel

A donor may make a required minimum distribution (RMD) to a donor-advised fund. The restrictions that exist around IRA distributions to donor-advised funds only apply to qualified charitable distributions (QCD), which allow donors aged 70 ? or older to transfer assets directly from their IRA to a charitable organization without having to recognize the amount of the distribution as income.

If the individual who inherited the IRA is younger than 70 ?, they are not eligible to make QCDs from this account anyway and there would be no issue with the donor directing the RMD to a donor-advised fund. If the donor is older than 70 ?, then they will need to decide whether they prefer the more tax-efficient option of making a QCD (in which case the money could not go to a DAF) or if they prefer to contribute to a DAF (in which case the distribution cannot be treated as a QCD).

Council members are encouraged to send any legal inquiries to [email protected].