Can anyone provide insight into why the tax law that created the possibility of an IRA distribution to a Charitable Gift Annuity (CGA) imposed a one-time $50,000 limit? I’m wondering since the general rules for a Qualified Charitable Distribution (QCD) have a $100,000 annual limit. That means an eligible IRA owner could contribute $100,000 every year and have those distributions fully excluded from taxable income, thereby reducing income tax receipts. In contrast, making a QCD to a qualified CGA results in a lifetime income stream to the donor (or other designated beneficiary) which is taxed as ordinary income, making it more beneficial for tax revenue.

Therefore, looking at it from the viewpoint of increasing tax receipts, the CGA option seems superior to a regular QCD. Since other SECURE Act changes have the effect of increasing tax revenue from IRAs, such as accelerating required distributions for beneficiary IRAs, why did Congress limit CGA contributions? It seems that reducing limitations on CGAs would benefit taxpayers, charities and government tax collections. The dollar limit for QCDs will be indexed for inflation starting in 2024, so the $100,000 annual limit will increase. These goals seem contradictory.