Planned Giving Insights and Information

The Tax Cuts and Jobs Act and Charitable Giving

Clocking in at 503 pages, the Tax Cuts and Jobs Act reported out of Conference Committee on December 15 is expected to be voted on by the House and Senate this week and presented to President Trump for his signature by December 22. While it is still possible that changes to the bill could be made at this late date, or that it might be delayed or not pass at all, it appears highly likely that it will pass as is before the end of this week. In the discussion below, we review the particulars of the law that are of most interest to fundraisers, as well as some provisions of interest to fundraisers that did not make it into the Conference version or made it in in altered form.

Life Expectancy Is Not a Guarantee

Our Client Services staff regularly takes client calls that go something like this: Client: I think your software is giving me the wrong deduction. PG Calc Client Services: Can you please explain what you mean? Client: Sure. My donor is 75 years old, so her life expectancy is 11.1 years using the 2000CM mortality table. I know the deduction calculation uses the 2000CM table but when I compute the deduction for a 5% unitrust with a fixed term of 11.1 years, I get a lower deduction than when I compute the deduction for the same unitrust that lasts for my donor’s lifetime. That doesn’t make sense! It does, actually. Let me explain.