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Incentives for Giving

The America Gives More Act

The components of the America Gives More Act of 2014 (H.R.4719) would provide immediate relief to communities across America by permanently extending three expired charitable giving incentives – food inventories, conservation easements, and the IRA rollover – as well as expanding the food donation provision and permitting taxpayers to claim charitable deductions from the previous year up through April 15. The bill also would simplify the current two-tiered foundation excise tax to a flat rate of one percent. The National Council of Nonprofits supports the America Gives More Act and urges the House and Senate to include all of its components in any tax bill considered before the end of the year.  The Council of Nonprofits has, along with several other national nonprofits, sent a letter to leaders in the House and Senate urging them to include the components of the America Gives More Act in any end-of-the-year tax bill.

Charitable Deduction

Federal tax law currently encourages individuals to give to charitable organizations whose missions they support by providing an itemized deduction. The President, Senators, Representatives, bi-partisan commissions, and think tanks have all put forward plans to reduce the deficit that propose changing the charitable giving incentive in one way or another. The Council of Nonprofits opposes any changes that would endanger the ability of nonprofits to serve their communities.

Estate Tax

The federal estate tax is an essential source of revenue for the federal government and serves as an incentive for wealthier individuals to give back to their communities through nonprofit organizations. The National Council of Nonprofits supports President Obama’s FY14 budget proposal to return the estate tax to 2009 levels of $3.5 million exemption for individuals ($7 million for couples) and a tax rate of 45 percent.

IRA Rollover

The IRA charitable rollover allowed individual taxpayers older than 70 ½ years to donate up to $100,000 from their individual retirement accounts (IRAs) and Roth IRAs to charitable nonprofits without having to treat the withdrawals as taxable income. As part of the fiscal cliff deal that passed earlier this year, Congress extended the IRA rollover for 2012 and 2013, ensuring that individuals and communities benefit from the work of charitable nonprofit organizations supported by these gifts. The IRA rollover is expected to be taken up in tax reform.

Food Inventory Donations

The food inventory enhanced tax credit allowed individuals, businesses, and corporations to donate wholesome food to nonprofits and deduct their cost basis plus one-half the difference between their cost and the market value of the donated goods. The value of the credit could not exceed twice the cost basis of the product donated. As part of the fiscal cliff deal that passed earlier this year, Congress extended the food donation tax deduction for 2012 and 2013. The food inventory credit is expected to be taken up in tax reform. For more information on efforts to restore this giving incentive, please visit Feeding America.

Land Conservation Easements

Under a conservation easement, a landowner voluntarily agrees to donate or sell certain rights associated with his or her property, such as the right to subdivide or develop, and a private organization or public agency agrees to hold the landowner’s promise not to exercise those rights. In exchange, the property tax burden of the land is lowered relative to its value. This incentive, according The Nature Conservancy, helped preserved over 2 million acres as of June 30, 2003. As part of the fiscal cliff deal that passed earlier this year, Congress extended the enhanced income tax deduction for conservation easements for 2012 and 2013.  The conservation easements deduction is expected to be taken up in tax reform. For more information on efforts to restore this giving incentive, please visit the Land Trust Alliance.