PG Calc Blog

The latest on planned giving from PG Calc.
Read our posts for comments on the latest topics and issues in planned giving. We hope you find our posts timely and interesting, and we hope you'll share your perspective with us!

IRS Proposes Regulations to Address Estate Tax Trap

IRS Proposes Regulations to Address Estate Tax Trap

The IRS has announced proposed regulations to address a technical, but potentially very important issue for taxpayers who make large taxable gifts during 2018-2025. The 2017 Tax Act nearly doubled the unified gift and estate tax exemption from $5,600,000 to $11,180,000. However, absent extending legislation, the doubling will expire at the end of 2025 and the exemption will go back to being computed the way it was prior to the 2017 Tax Act. Any of the increased exemption not used before it expires will be lost. This brings us to the technical part of the discussion.

PG Calc Acquires Hemmenway & Reinhardt

On November 15, 2018, PG Calc acquired Hemmenway & Reinhardt, a planned gift administration services company located in Swarthmore, PA.  Founded in 1987, Hemmenway & Reinhardt administers gift annuities, charitable remainder trusts, and pooled income funds for charities throughout the U.S.  Hemmenway & Reinhardt also assists charities with their annual state gift annuity filings.

60% of AGI Deduction Limit on Cash Gifts More Complicated than Many Realize

60% of AGI Deduction Limit on Cash Gifts More Complicated than Many Realize

Among the many changes wrought by the tax law passed at the end of 2017, one welcomed by the charitable community was the increase in the deduction limit on gifts of cash to public charities from 50% of a donor’s adjusted gross income (AGI) to 60%. We have read this section of the new law carefully and determined that the application of the 60% limit is more complicated – and, well, limited – than many realize. We lay out below how we understand the 60% limit should be applied and how it interacts with the 30% and 50% limits.

The Universal or Above the Line Income Tax Charitable Deduction

The Universal or Above the Line Income Tax Charitable Deduction

The Tax Cuts and Jobs Act of 2017 (the Tax Act) doubled the standard deduction and capped deductions on state and local taxes at $10,000, while retaining the income tax charitable deduction. The doubling of the standard deduction and capping state and local taxes means far fewer taxpayers will itemize their deductions on Schedule A of Form 1040. Fewer itemizers will mean fewer people benefiting from the itemization of their charitable deductions. The Council on Foundations is predicting a drop of $16B - $24B in charitable giving off a base of $390B. That’s about a 5% drop. A study by the Lilly Family School of Philanthropy projects a potential decline in charitable giving of 1.7% to 4.6%.

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