Last week, President Biden signed the American Rescue Plan (ARP), a $1.9 trillion package of initiatives aimed at facilitating the U.S.’s recovery from the health and economic effects of the COVID-19 pandemic. The ARP provides economic assistance to individuals in a variety of ways, primarily to Americans making less than $75,000/year (or couples making less than $150,000/year). It also extends the Paycheck Protection Program for businesses, creates block grants to help schools reopen and expand childcare, provides aid to state and local government, and much more.
A donor’s investment in contract in a gift annuity equals the present value of the annuity payments received by the donor over his or her lifetime. A donor’s unrecovered investment in contract equals the total amount of tax-free payments that he or she would have received had he or she lived to reach life expectancy, minus the total amount of tax-free payments the donor actually received while alive. Capital gain income is not considered when computing an annuitant's unrecovered investment in contract.
Yesterday, President Trump signed into law the Consolidated Appropriations Act, 2021, which will provide $900 billion in coronavirus relief and $1.4 trillion to continue to fund the government. The legislation covers a lot of territory and clocks in at over 5,500 pages. Because of the delay in passage and further delay in signing, there is little time before 2020 ends for donors to ask what will be extended and what will be changed for 2021. Below is our reporting of a few key provisions in this law that will impact fundraisers and donors.
Ready or not, it’s year-end again, which leads us right into tax season – that “most wonderful time of the year!” Here is our quick review of the tax reporting process for life income gifts.
The CARES Act and 2020 Charitable Tax Benefits Legislation known as the CARES Act introduced significant incentives to stimulate charitable giving in response to the Covid-19 pandemic. Some of those important tax incentives expire on December 31, 2020. Your donors will need to act quickly to take advantage of these tax-smart ways of giving before they are gone. Listed below are the most significant provisions applicable to charitable giving included in the CARES Act.