As we enter the final months of this unusual year, many people will be considering year-end charitable giving. Charitable gift planners and development officers know this giving season all too well. It goes without saying that 2020 has been a challenging year, and the fourth quarter seems to have snuck up quickly. Given the host of charitable tax law changes over the last 36 months, a refresher might be useful.
The 2017 Tax Cuts and Jobs Act: First, it is worth remembering that the 2017 Tax Cuts and Jobs Act increased the deductibility of cash contributions. Prior to the TCJA, cash gifts were deductible only to the extent of 50% of the donor’s adjusted gross income. TCJA increased that to 60%.
This 60% contribution obviously makes cash gifts more appealing for individual donors. However, it also can act to reduce the unrelated business income tax