DAF through a trust. Can this be passed through to income beneficiary?

[artp]

A simple trust with a single income beneficiary made a contribution of stock shares through a DAF. Can that be taken as a pass through item to the income beneficiary or must it be taken as a deduction on the trust income tax return?

[DANRVAN]

A trust does not pass through charitable contributions. 

The donations must be authorized by the trust instrument.

The donation must be made from the trust’s gross taxable income, or traceable to gross taxable  income.  Therefore, if the stock was purchased with trust income it is deductible by the trust.

If the stock was contributed to the trust, it is not deductible since it came out of corpus.

 

 

[artp]

DANRVAN,

Thanks for the reply. I had not dealt with DAF inside a trust before. I had not seen charitable contributions passing through a trust. I appreciate the insight.

[DANRVAN]

54 minutes ago, artp said:

DAF inside a trust before.

I don't see where it would make any difference.

[DANRVAN]

On 3/21/2025 at 9:48 AM, artp said:

A simple trust with a single income

Whoa right there!

Simple trust cannot have charitable distribution deduction.

[Sara EA]

A trust can be simple one year and complex another, depending on what it did with its income that year.  A simple trust has to pass through all income to the beneficiaries so it will have none of its own income to offset with a charitable donation.  If the trust document allows and it made a charitable contribution out of its income, it will be a complex trust that year.

[DANRVAN]

1 hour ago, Sara EA said:

A trust can be simple one year and complex another,

I believe that is true in some but not all cases.  For example,  a simple trust in the final year makes a distribution of corpus so it is treated as a complex trust.

However I don't believe a trust that allows a charitable contribution, whether made or not, can be treated as a simple trust in any year per Section 651(a):

In the case of any trust the terms of which—

(1) provide that all of its income is required to be distributed currently, and

(2 do not provide that any amounts are to be paid, permanently set aside, or used for the purposes specified in section 642(c) (relating to deduction for charitable, etc., purposes),

 

On 3/21/2025 at 9:48 AM, artp said:

simple trust with a single income beneficiary made a contribution of stock shares through a DAF

It is my understanding that is not allowed by a simple trust, and if so allowed the trust is a complex trust.

[DANRVAN]

The real question here is whether the source of the donated stock can be traced to taxable income and allowed as a deduction; or whether it came from corpus and not allowed as a deduction.