January 8, 2013
H.R. 8 for Charities for Dumm....Busy Tax Professionals.
First, Happy New Year, All!
As a public service, I thought I'd provide for all of you a down-and-dirty summary of the provisions of H.R. 8 (a.k.a. The American Taxpayer Relief Act of 2012, or "How I Avoided the Fiscal Cliff Retroactively") that specifically affect charities. I realize that one could argue that most of the tax provisions in the legislation (such as the rate changes, estate tax exemption amounts, and the AMT patch) will impact charities or charitable giving in one way or another. I'm going to focus more narrowly on those provisions with a direct impact on charity, as follows:
H.R. 8 Section 101(b)(2) (page 4 of the GPO version of the bill, linked above) - The Pease Limitation. Amends I.R.C. Section 68 to reinstate and amend the so-called "Pease Limitation", which phases out the benefit of certain itemized deductions (including the charitable deduction) for higher income individuals ($250,000 individual AGI, $300,000 married filing jointly AGI for 2013).
- H.R. 8 Section 206 (GPO page 12) - Contributions for Conservation Purposes. Extends I.R.C. Section 170(b)(1)(E)(vi) and I.R.C. Section 170(b)(2)(B)(iii) until December 31, 2013. I.R.C. Section 170(b)(1)(E) contains the rules for contributions of Qualified Conservation Easements; I.R.C. Section 170(b)(2)(B) discusses the treatment of Qualified Conservation Easements by corporate farmers and ranchers.
H.R. 8 Section 208 (GPO page 12) - Charitable IRA Rollover (with Retroactivity!). The Charitable IRA rollover contained in I.R.C. Section 408(d)(8) was extended from December 31, 2011 to December 31, 2013. But wait, you say - what if I wanted to make a contribution from my IRA in 2012, which was in the history books by the time H.R. 8 actually passed? No worries for you if you act fast! Qualified charitable distributions made after December 31, 2012 and before February 1, 2013 shall be deemed to have been made on December 31, 2012.
- H.R. 8 Section 314 (GPO page 18) - Contributions of Food Inventory. The special rules for contributions of food inventory in I.R.C. Section 170(e)(3)(C) are extended from December 31, 2011 to December 31, 2013.
- H.R. 8 Section 319 (GPO page 19) - Payments to Controlling Exempt Parents. The special rule limiting the impact of I.R.C. Section 512(b)(13) to only those amounts in excess of what would be allowed under Section 482 is extended to December 13, 2013.
H.R. 8 Section 325 (GPO page 21) - S Corporation Basis Adjustments. The special rule contained in I.R.C. Section 1367(a)(2) regarding the adjustment of a shareholder's basis in S Corporation stock to reflect charitable contributions is extended to December 31, 2013.
There are bond financing provisions that might be of special interest to some nonprofits, and I'm certain that health care facilities will be interested in Title VI of the bill, which contains a number of Medicare and other changes. Other than those provisions, what did I miss?
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