On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended until December 31, 2011 certain tax provisions that expired at the end of 2009. Several of these provisions affect exempt organizations.
- The exclusion from unrelated business taxable income (UBTI) of rents, royalties, annuities and interest paid by a controlled organization to its tax-exempt parent, which ordinarily would be considered UBTI pursuant to section 512(b)(13) of the Internal Revenue Code. This exclusion is only applicable to payments made pursuant to either (i) a binding written contract in effect on August 17, 2006, or (ii) a contract which is a renewal, under substantially similar terms, to a binding written contract in effect on August 17, 2006.
- Enhanced charitable contribution deductions for (1) contributions of capital gain real property made for conservation purposes, (2) contributions of food and book inventory from the trade or business of corporate and non-corporate taxpayers, and (3) contributions of computer technology equipment by corporate taxpayers.
- The IRA charitable rollover, which permits individuals age 70½ and older to exclude from gross income distributions from a traditional or Roth Individual Retirement Account of up to $100,000, if given for charitable purposes, provided the distribution is made directly by the IRA trustee to a public charity other than a supporting organization or donor-advised fund. Distributions made from IRAs as charitable contributions do not qualify for an income tax charitable deduction.
The new law also made significant (albeit temporary) changes to the federal gift, estate and generation skipping transfer taxes, summarized here.