In the wake of the dramatic changes to the federal gift and estate tax laws brought about by the enactment of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “2010 Tax Relief Act”; P.L. 111-312) at the end of 2010, 2011 was relatively quiet. It brought few statutory changes on the charitable giving front, aside from the expiration of certain tax provisions noted below. Nevertheless, new case law, Internal Revenue Service rulings and economic trends have provided more than a few topics for discussion in this update. Meanwhile, with the 2010 legislation set to expire at the end of 2012, we anticipate more excitement on the horizon.
Expiration of Tax Laws Relating to Charitable Gifts
The following charitable giving incentives, which had most recently been extended by the 2010 Tax Relief Act, expired on December 31, 2011:
• Tax-free distributions from IRAs for charitable purposes
• Favorable basis adjustment to stock of S corporations making charitable contributions of property
• Increased contribution limitations and carryover periods for charitable contributions of qualified conservation property
• Enhanced charitable deductions for contributions of food inventory, book inventories to public schools, and corporate contributions of computer equipment
It is currently unclear whether Congress will act this year to retroactively extend or make permanent any of the above provisions.
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