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Temporary Changes to Rules
Governing Deductions for Charitable Contributions
Tax law enacted September 23, 2005, has modified rules governing tax deductions for charitable contributions by both individual and corporate taxpayers. The changes for these two groups of taxpayers are not the same, however. Impacted are those gifts made after August 27, 2005, and before January 1, 2006. A very brief explanation of the changes follows.
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 Individual Charitable Giving
The new tax law suspends both the 50 percent limitation and the phase-out rules for cash contributions made to any charitable organization during the time period noted above. Individuals can write off up to 100 percent of adjusted gross income for gifts made in 2005 to charities benefiting Katrina victims, as well as other qualified organizations that are not providing hurricane relief.
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Corporate Charitable Giving
Under the new law, the general 10 percent limitation is suspended for Hurricane Katrina cash contributions made by corporations before January 1, 2006. Unlike the tax break provided to individuals, the corporate tax break is only available for Katrina-related cash contributions.
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These temporary changes may benefit taxpayers whose tax deductions might have been limited by existing law. Any donor/taxpayer wanting to take advantage of the new law should contact a tax professional for competent advice related to their individual situation, as the new law is more complicated than outlined above.
Information provided courtesy of Carter, Belcourt & Atkinson, P.A., Certified Public Accountants (offices in Tampa and Lakeland, Florida) and should not be construed as a substitute for professional tax services nor as legal, accounting, tax, investment or other professional advice
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