Last night, the Senate passed H.R. 5771, which would retroactively extend through the end of 2014 expired tax incentives for individuals, businesses, and tax-exempt entities.  As reported in our Exempt Organizations Advisory on December 4, the House passed the bill in early December, and President Obama is expected to sign the bill.

Provisions of interest to exempt organizations include:

  • Qualified Conservation Contributions: The increase of the deduction limitation from 30 percent of the donor’s contribution base to 50 percent of the donor’s contribution base. 
  • Extension of Tax-Free Distributions From Individual Retirement Plans for Charitable Purposes:  In the case of IRA rollovers to charitable organizations, the ability of taxpayers age 70 ½ or older to donate up to $100,000 from Roth or traditional IRAs to certain charitable organizations without including the amount of their IRA withdrawals in gross income.    
  • Contributions of Food Inventory:  Enhanced deductions for contributions of apparently wholesome food from any trade or business of the taxpayer.  
  • Payments from Controlled Organizations:  Exemption from the unrelated business income tax provisions of rent, royalty, annuity, and interest income paid to a controlling organization from controlled organizations as long as the payments are not in excess of fair market value and are made pursuant to a binding contract that was in effect on August 17, 2006, or an extension of such contract.
  • Basis Adjustment to Stock of S Corporations:  For charitable contributions of property, reducing the basis of an S Corporation shareholder’s stock by the pro-rata share of the adjusted basis of the contributed property rather than the shareholder’s pro rata share of the contribution.