October 25th, 2018
By Cary Hall, Wyche Law Firm
The Tax Cuts and Jobs Act of 2017 was signed into law on December 22, 2017. This Act made major changes to the federal income tax system, including reduced tax rates, eliminating some itemized deductions and limiting others, elimination of dependency exemptions, higher standard deductions for individuals and others.
Some of the changes implemented by the Act may impact persons donating to conservation organizations. First, cash contributions to public charities (almost all land trusts are public charities) have a 60% AGI limitation, increased from 50%. The AGI limitation caps the percentage of adjusted gross income that can be sheltered with a charitable gift deduction.
The increased standard deduction ($12,000 for single filers and $24,000 for married filing jointly) and the cap on state and local tax deductions (cap is $10,000) and elimination of other itemized deductions, may reduce the tax benefit of small charitable deductions, since total itemized deductions must exceed the standard deduction before it makes sense to claim them.The changes make it even more beneficial for donors who are over the age of 70-1/2 to make charitable gifts out of their Individual Retirement Accounts. A gift made from the IRA of a donor over the age of 70-1/2 is not taxable to the donor, as regular IRA distributions are, so the charity receives the full, before tax distribution. All such distributions count towards the Required Minimum Distributions that the donor must take each year from the IRA. These tax-free distributions from IRAs to charity are capped at $100,000/year.
Cary's practice is evenly divided between general corporate and transactional matters and tax law. He has been recognized as one of the "Best Lawyers in America" for nearly 20 years.
For more information about making a gift to Upstate Forever directly from your IRA, please contact Aldon Knight, Director of Development & Community Engagement, at (864) 250-0050 ext. 31 or email@example.com