CGP Legislative Update. November 6, 2017

Transcription

1 CGP Legislative Update November 6, 2017

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3 House I N T R O D U C T I O N M A R K - UP F L O O R A C T I O N

4 Individuals Creates individual tax brackets of 12%, 25%, 35%, and maintains 39.6% for higher-income taxpayers Nearly doubles the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly and eliminates personal exemptions and almost all itemized deductions CHARITABLE DEDUCTION: Maintains the charitable deduction for the roughly 5 percent of Americans who may still itemize and raises the 50% AGI limitation for cash contributions to public charities and certain private foundations to 60% while retaining the 5 year carryover period, eliminates the Pease limitation (Title I, Subsection D, Section 1306) ESTATE TAX: Phases in a full repeal of the estate tax between 2018 and 2024 but immediately doubles the current exemption to $11 million for individuals (Title I, Subtitle G, Section 1602)

5 Corporations Permanently lowers the corporate rate to 20% Creates a 25% rate for pass through businesses, which includes a guard rail provision allowing these entities to either claim only 30% of income as passthrough income or classify a high percentage of income as business income

6 Exempt Orgs EXECUTIVE COMPENSATION: Imposes a 20 percent excise tax on compensation in excess of $1 million paid to any of an organization s five highest paid employees (including cash and the cash value of all remuneration paid in a medium other than case except for payments to a tax-qualified retirement plan) (Title IV, Subtitle I, Section 3803) UBIT: Extends UBIT to all 501(a) entities (including pension plans) (Title V, Subtitle A, Secs ), and permits exclusion from UBIT for research income only if the research is made publicly available EXCESS BUSINESS-HOLDINGS TAX: Allows private foundations to wholly own for-profit businesses when received by gift or bequest so that the profits of such businesses can be dedicated to funding the private foundation s charitable mission. JOHNSON AMENDMENT: Repeals the Johnson Amendment as it relates to certain churches to make statements relating to political campaigns in the ordinary course of their activities

7 Exempt Orgs PRIVATE FOUNDATION EXCISE TAX: Creates a new 1.4% excise tax rate on private foundations net investment income (eliminating the current two-tiered structure) ENDOWMENTS: Imposes a 1.4% excise tax on private college and university (not public and state colleges) endowments for institutions that have at least 500 students and assets (other than those used directly in carrying out the institution s educational purposes) valued at $100,000 or more per full-time student DAFs: Require DAFs to disclose annually the average amount of grants made from their funds as well as their policies on inactive funds

8 Exempt Orgs SUBSTANTIATION REQUIREMENTS: Repeals substantiation exception for gifts reported by donee organization COLLEGE ATHLETICS: Repeals special rule that provides a charitable deduction of 80% of the amount paid for college athletic seating rights MILEAGE RATE: Adjusts the charitable mileage rate for inflation PRIVATE OPERATING FOUNDATION: Would not recognize an art museum as a private operating foundation unless it is open to the public for at least 1,000 hours per year

9 Senate H AT C H D R A F T I N G B I L L T I M I N G P O T E N T I A L P I T FA L L S

10 Take Action Call your Representative TODAY and ask they contact the Ways & Means Committee to request they add an universal charitable deduction to H.R. 1 before it advances to the House Floor Call your Senators TODAY and ask that they contact the Finance Committee to request they include an universal charitable deduction before the tax reform bill is released Talking points are available on the CGP website

11 N E X T C AL L T U E S D A Y, N O V E M B E R 2 1 ST, 1 1 : 3 0 A M E S T Stay tuned to CGP for the latest updates.

12 Questions? Comments?