By now you know about the upcoming retirement of Planned Giving Manager (PGM desktop) and the migration route to PGM Anywhere. This process has been seven years in the making, as we originally targeted PGM Anywhere to run basic calculations on tablets and have been expanding its functionality from year to year to eventually take the place of PGM desktop.
Charitable giving incentives are receiving collateral damage from a tug of war between the federal treasury and the states over the December 2017 Tax Act’s limitation of the state and local tax (SALT) deduction to $10,000.
Following the December 2017 passage of the 2017 Tax Act, some in the gift planning community raised the question of whether the 2017 Tax Act’s elimination of miscellaneous itemized deductions extended to the deduction for unrecovered investment in contract (UIC) at the death of the last annuitant of a charitable gift annuity, as that deduction had appeared under the heading “Other Miscellaneous Deductions” on Form 1040 Schedule A. But the 2017 Tax Act only eliminated the miscellaneous deductions subject to the 2% floor, which the UIC deduction was not subject to. The UIC deduction remains available, as is confirmed in the tax forms, instructions, and publications the IRS has issued to reflect the 2017 Tax Act changes for 2018. This deduction equals the total of all tax-free portions of the annuity that have not yet been distributed as of the death of the last annuitant and is taken on the deceased’s final income tax return.
A much-talked-about December 2018 blog post by Jon Tidd, the tax attorney and frequent speaker to planned giving groups, asks whether gifts to charitable remainder trusts will now require a qualified appraisal, even if the gift is funded with cash or publicly traded securities.
The word from Washington, DC is that tax reform has stalled in Congress until after the 2016 election. And what about the tax extenders, including the now-expired IRA charitable rollover? As of a couple of weeks ago, Congress appeared to be on a slow glide path to vote through a 1-year extension for 2015 in mid to late December. It is still possible that Congress might fear the ire of frustrated supporters and constituents during the 2016 election year enough to vote through a 2-year extension for 2015 and 2016. It is also possible the extension could stall out, and John Boehner leaving the pilot seat as House Speaker may factor into that.