24 June 2021 - Events
Last week, House Republicans released an initial draft of their tax reform bill, the Tax Cuts and Jobs Act, which was modified by a subsequent markup by House Ways and Means Committee Chairman Kevin Brady (R-TX). The full House Ways and Means Committee is scheduled to produce an additional markup of the bill this week, and House Speaker Paul Ryan (R-WI) has indicated the bill is on track for a vote before Thanksgiving.
The marquee features of the bill—reductions in tax rates for individuals, corporations and pass-through entities, the elimination of many credits and deductions and a shift to a territorial tax system for multinational corporations—have been widely reported. However, the details of the bill include some less reported changes that might come as a surprise to charitable organizations and donors. In our view, the structure of the bill creates incentives to accelerate charitable deductions in the current year and to consolidate charitable contributions on a going-forward basis.
With the pace of substantial donations to private foundations, or PFs, and charitable trusts likely to accelerate, the new tax paradigm will place additional emphasis on navigating the rules that apply to the administration of charitable entities.
Click here for a brief review of the provisions of the tax bill relevant to charitable giving, as originally published by Trusts & Estates.