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Monday November 24, 2014

Washington News

Washington Hotline

IRA Rollover and Tax Extenders

On May 29, Chairman Dave Camp (R-MI) of the House Ways and Means Committee held a hearing and passed five charitable bills and a business bill on bonus depreciation. The six bills will now proceed to the floor of the House for a vote by the full House of Representatives.

Under the leadership of Chairman Camp, the Ways and Means Committee now has passed 12 separate tax bills. Chairman Camp stated that he prefers comprehensive reform, but he views these individual bills as steps toward that goal. Camp commented, “We are making progress on tax reform. It may not be in a complete bill, but this is incremental progress.”

The effort to pass permanent legislation reflects Camp’s belief that many of these provisions have effectively been made permanent through continued passage. He noted, “If we have extended something for 10 years, let’s call it what it is, that’s permanent policy. We should not have to raise taxes in other places in the economy to keep current tax law.” While there are new provisions such as the ability to delay charitable gifts until April 15 and deduct them for the prior year, most of the bills make permanent tax provisions that have been in effect for a decade or longer.

The process was questioned by Ranking Member Leader Sander Levin (D-MI). He has generally supported the charitable provisions in the bills. However, he was concerned about the cost. Levin noted, “But we are not here today basically to debate the good works of charities, or nutrition programs or conservation across this country. There is agreement about their significance, but it is a mistake to approach them in a way that makes provisions permanent without consideration of their place in a broader framework and with reckless disregard for their cost and their impact on other provisions, especially at a time of immense pressures on non-defense discretionary programs.”

The five charitable provisions passed on a party line vote.

1. IRA Charitable Rollover (H.R. 4619) – IRA owners over age 70½ are permitted to make transfers directly from their custodian to qualified charities in amounts up to $100,000 per year.

2. Conservation Easements (H.R. 2807) – The deduction limits for charitable easement contributions are increased to 50% of adjusted gross income and the carry over extended from five to 15 years.

3. Food Inventory Gifts (H.R. 4719) – Enhanced deductions are permitted for gifts of food to relief organizations.

4. April 15 Gift Date (H.R. 3134) – Gifts from January 1 through April 15 would be deductible for the prior year.

5. Private Foundation Excise Tax (H.R. 4691) – The 2% excise tax on income for most private foundations is reduced to 1%.

Published May 30, 2014
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