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.
It’s great to get a new machine. But don’t let IT haul off your old machine just yet. If you are a Planned Giving Manager (PGM) user, there are a few things you will very much want to get copied off your old machine before it goes into the trash. This also applies when your machine is refurbished or rebuilt, such as when reformatting and reinstalling Windows or getting a new hard drive. Once your IT department wipes the hard disk from the old machine, you can be out of luck on getting your old PGM data back, especially if you don’t have good backups. While we can send a download link to install a fresh copy of PGM on your new machine, here are the categories of files that you may want to copy over to your new machine from your old machine: pgmw32.dat configuration file with all your Customize menu settings. Copying this file means you don’t have to remember and reenter all your Customize settings for your organization information, etc. Sometimes you can get lucky if a second user at your organization also has PGM so you can copy their configuration file to your new machine. pgm.inp optional startup defaults file (if it exists). If you use the File menu option to change the startup defaults that come up when you start a new input case (many people don’t), copying this file means you don’t have to remember and reenter your changes. .nar files created for custom narratives (if any). We can usually send copies if we created these for you and you haven’t edited them yourself. .gar files created by PG Calc for custom gift annuity rate tables (if any). We keep copies and can resend them to you. .bmp files for custom logos. These are saved in the icons subfolder and are often created by the client in which case we would not have copies to resend. .inp files saved on the local computer. You can lose your saved donor cases permanently if the only copies are on your old machine and you have no backups. .doc files created by editing in Word. You may want to copy these if you made edits or didn’t also save an .inp file for the case. .xls files creating by transferring to Excel. You may want to copy these if you made edits or didn’t also save the .inp file for the case. Other files. If you’ve saved other donor files with your PGM files on your machine, such as transmittal letters, you may want to copy them as well.