On a 93-2 vote, the Senate has passed an amended version of H.R. 6049, the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. Core bill components include clean energy tax incentives, protection of millions of Americans from the alternative minimum tax (AMT), extensions of expiring family and business tax cuts, and charitable giving extenders and incentives.
Summary of Charitable Extenders and Incentives:
Charitable provisions that expired at the end of 2007 including:
- tax-free distributions from individual
retirement plans for charitable purposes;
- enhanced charitable
deductions for contributions of food inventory;
- enhanced charitable
deductions for contributions of book inventory to
public schools;
- qualified computer contributions; and
- basis
adjustment to stock of S corporations making charitable contributions
of property
are extended through December 31, 2009.
New tax incentives for charitable giving include:
Temporary Suspension of Limitations on Charitable Contributions. The amount allowed as a charitable deduction in any taxable year may not exceed ten percent of the corporation’s taxable income or fifty percent of an individual’s adjusted gross income. The proposal temporarily waives these limits regarding charitable cash contributions dedicated to Midwestern disaster relief efforts. The proposal is effective for contributions paid during the period beginning on the earliest applicable disaster date for all States and ending on December 31, 2008.
The estimated revenue loss of this proposal is $433 million over ten years.
Increase in Standard Mileage Rate for Charitable Use of Vehicles. The mileage rate individuals may use to compute a tax deduction for personal vehicle expenses associated with charitable work is statutory and has not been increased since 1997 and is currently at 14 cents per mile. For a taxpayer assisting in relief efforts related to the Midwestern disaster, the proposal sets the charitable mileage rate at seventy percent of the current standard business mileage rate, beginning on the applicable disaster date and ending on December 31, 2008.
The estimated revenue loss of this proposal is $9 million over ten years. Exclusion from Income of Mileage Reimbursements for Charitable Volunteers. In general, reimbursements received for operating expenses of a personal vehicle used in connection with charitable work in excess of the statutory charitable mileage rate are taxable income to the recipient. However, reimbursements for charitable mileage attributable to the Midwestern disaster up to the amount of the standard business mileage rate will not be considered taxable income through December 31, 2008.
The estimated revenue loss of this proposal is $1 million over ten years. Tax Benefits Not Available with Respect to Certain Property. The proposals relating to additional first-year depreciation, increased expensing, and the five-year carryback of NOLs do not apply with respect to certain property. Specifically, as was done in the tax relief package for the Katrina disaster, the tax relief provisions do not apply with respect to golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, or liquor stores. The proposals also do not apply with respect to any property used directly in connection with gambling, animal racing, or the on-site viewing of such racing, and with respect to buildings or portions of buildings dedicated to such activities (except if the portion so dedicated is less than 100 square feet).
Full Text:
Due to length, the complete statement regarding the entire bill from Chairman Max Baucus is attached in PDF format below.
