Charitable Tax Extenders for 2010 and 2011
Each year since 2006, Congress has passed the following charitable tax extenders. In some years, the passage was late in the year, but the provision was retroactive to January 1.
In 2010 the tax extenders bill was enacted on December 17 when the President signed into law The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This tax act restored six charitable tax extenders that were applicable from January 1, 2010 until December 31, 2011.
Because the tax extenders may be enacted late in the year with an effective date retroactive to January 1, these six provisions are included in GiftLaw Pro Chapters. The applicable GiftLaw paragraph headers include the phrase "(Tax Extender)" to inform readers that they must also check the GiftLaw weekly eNewsletter to know that an extender has passed and is retroactive to January 1.
The six charitable provisions include the following:
- Conservation Gift Limits Gifts of property for conservation purposes benefit from increased deduction limits. The normal 30% limit for appreciated property gifts is increased to 50% and the carry-forward limit is extended from five years to 15 years.
- Food Inventory Gifts An enhanced deduction for contributions of "apparently wholesome" food will be available for all donors. The deduction is the lesser of twice the basis or basis plus one-half of the appreciation.
- Book Inventory Gifts C Corporations may claim an enhanced deduction for book inventory gifts to public schools. The schools may be from kindergarten through grade 12.
- Computers and Software Corporations may make gifts to elementary, secondary and post-secondary schools of computer equipment. These deductions will qualify for the enhanced contribution.
- IRA Charitable Rollover Each IRA owner may make a transfer of up to $100,000 per year to a qualified charity. The IRA charitable rollovers are tax-free and not included in adjusted gross income.
- S Corporation Appreciated Gifts A Subchapter S corporation may give appreciated stock or land to charity. Only the basis of the S corporation in the donated asset will be used to reduce the shareholder basis, even though the full fair market value deduction is claimed by the shareholder.