The House of Representatives passed H.R. 5771, which would retroactively extend through the end of 2014 expired tax incentives for individuals, businesses, and tax-exempt entities. According to press reports, the Senate is likely to pass the bill, and it appears that President Obama will support a short-term deal for the extenders.
Provisions of interest to exempt organizations include:
- Qualified Conservation Contributions: The increase of the deduction limitation from 30% of the donor’s contribution base to 50% 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.