H.R. 5806, Supporting America’s Charities Act

H.R. 5806

Supporting America’s Charities Act

Sponsor
Rep. Dave Camp

Committee
Ways and Means

Date
December 10, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, December 10, 2014, the House will consider H.R. 5086, the Supporting America’s Charities Act, under a suspension of the rules.  H.R. 5806 was introduced on December 8, 2014 by House Committee on Ways and Means Chairman Dave Camp. The bill reflects the text of three bills – H.R. 2807, H.R. 4719, and H.R. 4619 reported favorably by the Committee on Ways and Means on June 26, 2014.  Additionally, the three reported bills were combined and considered by the House as part of H.R. 4719, the America Gives More Act, which passed the House on July 17, 2014 by a vote of 277-130. (See Roll Call #432).

Bill Summary

H.R. 5806 improves and makes permanent three temporary provisions of the Internal Revenue Code, which under the bill would be effective for distributions in the tax years beginning after 2013.

Qualified Conservation Contributions.  Under current law, an individual generally may deduct charitable contributions of capital assets or business property up to 30 percent of the individual’s adjusted gross income (AGI).  Contributions of qualified real property interests (typically easements) to certain tax-exempt organizations exclusively for conservation purposes qualify for the 30-percent limitation.  A temporary rule increased the 30-percent limit to 50 percent of AGI for conservation contributions made before 2014.  Additionally, farmers and ranchers could generally deduct the value of a qualified conservation easement contribution up to 100 percent of AGI (or taxable income in the case of a corporate farmer or rancher).  H.R. 5806 makes the temporary deduction limitations for contributions of conservation easements permanent.  In addition, Alaska Native Corporations would be eligible to deduct a qualified conservation easement contribution up to 100 percent of taxable income.  Both changes would be effective for contributions made after 2013.

Charitable Deduction for Contributions of Food Inventory.  Under current law, a taxpayer’s charitable deduction for contributions of inventory generally is limited to the lesser of the cost of the inventory or its fair market value.  A permanent special rule permits C corporations to claim an enhanced deduction up to 10 percent of net income for certain contributions of food and non-food inventory.  A temporary provision that applied to contributions made before 2014 expanded the enhanced deduction for contributions of food inventory to any taxpayer engaged in a trade or business. H.R. 5806 makes the enhanced deduction for contributions of food inventory by any type of business permanent.  It would also provide a special cost basis rule for certain pass-through businesses and a valuation rule for difficult to value food inventory.  Additionally, the bill would allow deductions of food inventory up to 15 percent of the taxpayer’s taxable income.  The changes would apply generally to contributions of food inventory after 2013.

Tax-free Distributions from IRAs for Charitable Purposes.  Under current law, a taxpayer may claim an itemized deduction for charitable contributions, limited to a certain percentage of the individual’s AGI.  A temporary provision that expired at the end of 2013 allowed individuals to exclude from income qualified charitable distributions from IRAs up to $100,000 per tax year.  A qualified charitable distribution was any distribution from an IRA if the IRA owner was at least 70½ years old and was made directly to a qualifying public charity or private foundation.  H.R. 5806 makes tax-free distributions from IRAs for charitable purposes permanent.

Cost

According to an estimate from the Joint Committee on Taxation, the legislation would reduce federal revenues by $11.115 billion over 2015-2024.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.