Joint Statement on Biden Administration’s FY 2022 Budget Request to Congress |
News |
Written by ACGA & CGP |
Earlier this summer, the White House released details of its fiscal year 2022 budget request to Congress. This budget includes, among many other provisions, changes that would increase taxes on certain individuals. One such provision would have a significant impact on charitable giving, effectively eliminating the benefits of split-interest gifts for taxpayers, potentially resulting in the loss of hundreds of millions of dollars, if not more, to our nation’s charities. Specifically, this White House proposal would treat transfers of appreciated assets – including donations to a split-interest trust – as “realization events.” Under current law, donors of transfers of appreciated assets are not taxed on the appreciation at the time of the transfer. The new White House proposal, however, would tax the difference between the asset’s fair market value on the date of the transfer and the asset’s adjusted basis (its “basis”). If the asset appreciated over its basis, this would be treated as taxable gain. While there is an exclusion allowed for the charity’s share of the gain, gain allocable to the non-charitable portion would be taxed to the donor at the time of the transfer. If enacted, charitable Americans would lose significant tax benefits in funding split-interest gifts, which in turn would dry up an enormous pipeline of charitable gifts, ultimately leaving less money to flow to charities and the communities they serve. |
Last Updated on Thursday, August 05, 2021 02:05 PM |