Can donor-advised fund contributions in 2025 be carried forward if they exceed AGI limits, and for how long?
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Executive summary
Yes. Contributions to a donor-advised fund (DAF) made in 2025 can be deducted in 2025, and any portion that exceeds the charitable deduction limits may be carried forward under existing carryforward rules (generally five years for amounts limited by AGI) according to standard guidance like NPTrust (five‑year carryforward) and multiple advisory pieces urging donors to bunch in 2025 to lock in current rules [1] [2]. New law changes effective 2026 introduce a 0.5%-of‑AGI floor that will affect how carried‑forward amounts are treated in later years (Holland & Knight; Eide Bailly) [3] [4].
1. What the sources say now: DAF gifts in 2025 get an immediate deduction
Every practitioner guidance piece and DAF explainer in the record says a contribution to a donor‑advised fund is a completed gift to a public charity and therefore produces a tax deduction in the year the contribution is made — so contributing to a DAF before December 31, 2025 secures the 2025 deduction (San Jose CPA; Kirsch CPA; DAFgiving360) [5] [2] [6].
2. Carryforwards: the conventional five‑year safety net
Tax‑oriented nonprofits and intermediaries continue to describe the standard federal rule that charitable deductions limited by AGI may be carried forward for up to five years. NPTrust explicitly states a five‑year carryforward applies to unused charitable deduction amounts [1]. This is the principal source in the set that directly states the five‑year carryforward timeframe [1].
3. The 2026 rule change that complicates carryforwards
Multiple law‑firm and accounting firm analyses of the 2025 legislative package warn that beginning in 2026 a new 0.5%‑of‑AGI floor will apply and that any deductions carried forward from 2025 will likely be subject to that floor in subsequent years (Holland & Knight; Eide Bailly) [3] [4]. Holland & Knight explains that carried‑forward amounts from 2025 would probably be subject to the 0.5% floor in 2026 or later, based on statutory language [3]. That means a carryforward does not guarantee the same treatment it would have had under pre‑2026 rules [3] [4].
4. Practical effect: how donors should read “carry forward” for 2025 DAF gifts
Put plainly: you can contribute to a DAF in 2025 and claim the deduction in 2025; if your deduction is limited by AGI, the excess traditionally carries forward (NPTrust) [1]. But advisors and tax firms warn that the new 0.5% floor that takes effect in 2026 will reduce the deductible portion of any carryforward and will be applied when you use the carryforward in 2026 or later (Holland & Knight; Coldstream) [3] [7]. One example in the record shows a $100,000 carryforward yielding a $99,000 allowable deduction in a later year after the floor is applied (Coldstream) [7].
5. Competing framings and implicit agendas in the sources
Industry and advisory sources uniformly recommend “bunching” into 2025 — many of those pieces are produced by organizations that manage DAFs or advise donors, and they emphasize the tax‑planning benefit of funding a DAF in 2025 to avoid harsher limits in 2026 (DAFgiving360; Fidelity; Kirsch CPA; Coldstream) [6] [8] [2] [7]. Law firms (Holland & Knight) and accounting firms (Eide Bailly) emphasize statutory interpretation and risk: carried amounts face the 0.5% floor once applied after 2025 [3] [4]. Donor‑advised fund providers have an incentive to encourage upfront funding of DAFs; tax advisers have an incentive to highlight planning opportunities — readers should note those institutional perspectives [6] [2] [8].
6. What the record does not establish or answer definitively
Available sources do not mention any IRS revenue ruling or final Treasury regulation explicitly confirming how carryforwards originating in 2025 must be treated under the new floor once claimed in 2026; the assertion that 2025 carryforwards “would be subject” to the 0.5% floor is a legal interpretation reported by Holland & Knight and echoed by others, not a cited IRS administrative ruling in this set [3] [4]. The record does not include formal IRS guidance that resolves every technical carryforward calculation question [9] [3].
7. Bottom line for donors and fundraisers
If you want the 2025 deduction for a large planned gift, funding a DAF before year‑end 2025 secures that deduction [5] [2] [6]. If the deduction exceeds your AGI limits, standard five‑year carryforward rules are described in practitioner guidance [1]. But expect the 0.5%‑of‑AGI floor effective in 2026 to influence how much of any carried‑forward amount is actually deductible when you use it later — advisors in the record urge bunching into 2025 to maximize benefit [3] [7] [2]. Consult a tax adviser because the sources show interpretation differences and no single administrative ruling is included here [3] [4].