# What This Bill Does

This bill makes two main changes to how people can use money from their retirement accounts for charitable giving. First, it allows people over 70½ years old to make a one-time transfer of up to $50,000 directly from their Individual Retirement Account (IRA) to special charitable investment vehicles. Second, it automatically increases these dollar limits every year to keep up with inflation.

The key innovation here is the "split-interest entity" option. Normally, when you give money to charity from your IRA, it goes directly to the charity. This bill lets you instead put that money into three types of special arrangements: a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity. These are fancy financial structures that work like this: you put your IRA money in, the arrangement pays you income for the rest of your life (or your life and your spouse's life), and when you eventually pass away, whatever's left goes to charity. This gives you a steady income stream while still supporting charitable causes you care about.

Who benefits? Primarily wealthy retirees with substantial IRAs who want to support charities while also receiving income. This is a one-time election, meaning you can only do this once in your lifetime. The $50,000 limit applies to the total amount you can transfer this way. Starting in 2023, both the $50,000 limit and the existing $100,000 annual charitable distribution limit will automatically increase each year based on inflation, so these numbers won't become outdated as the cost of living rises.

The practical effect is that this bill gives affluent retirees another tool for charitable giving that provides them with ongoing income, while the inflation adjustment ensures that middle-class retirees won't see these charitable giving options become less valuable over time as inflation erodes the dollar amounts.

To amend the Internal Revenue Code of 1986 to allow a one-time election for a qualified charitable distribution to a split-interest entity and to inflation adjust the limits for qualified charitable distributions.

Beyer, Donald S.

 <p>This bill allows taxpayers an election to make a qualified charitable distribution to a split-interest entity (i.e., a charitable remainder annuity trust, charitable remainder unitrust, or charitable gift annuity funded exclusively by qualified charitable distributions). The aggregate amount of distributions may not exceed $50,000, adjusted for inflation for taxable years beginning after 2022.</p>