Charitable Giving and Planning After the One Big Beautiful Bill Act

IRC Section 642(c) governs income tax charitable deductions for trusts and estates, which are substantially different from charitable contribution deductions for individuals and corporations under Sec. 170 and Sec. 642(c)(1). Trust and estates attorneys must have a complete understanding of these rules and reporting requirements for claiming charitable deductions and the impact on certain tax and estate planning strategies.

Section 642(c) sets forth unique rules on charitable deductions. There is no adjusted gross income limitation for trusts, and trusts can contribute to foreign charitable organizations. Since trusts can be taxed themselves or as carryout taxable income to beneficiaries, trust and estate attorneys and fiduciaries need to understand these rules to preserve these valuable deductions.

Although deductible on the estate return, specific bequests are considered deductions from the principal and do not generate a tax deduction. However, making charitable bequests with particular assets can generate significant tax savings, which must be appropriately reported to ensure deductibility.

In addition, the OBBBA introduces several changes impacting charitable deductions, particularly for trusts, such as unlimited deduction potential, specific trust requirements, and the possibility of changes to individual charitable deduction rules impacting trusts and estate planning.

Trusts and estates must adhere to various rules to obtain income tax deductions, such as the governing document and gross income requirements, charitable purpose and eligible donee requirements, and other additional planning and reporting considerations.

Listen as our panel of trust and estate tax experts explains the caveats and considerations for income tax charitable deductions under Sec. 642(c), the impact of OBBBA, deduction of the charitable remainder interest, split-interest gifts, governing instrument and gross income requirements, and planning and reporting requirements.

I. Governing documents requirements

II. Internal Revenue Code requirements for trusts and estates

III. Impact of OBBBA

IV. Reporting obligations and challenges

V. Recent cases and planning considerations

The panel will review these and other critical issues:

• Charitable deduction rules and requirements
• Impact of the OBBBA
• Reporting of charitable deductions
• Distinctions between contributions made from the corpus and those made from income
• Types of trusts eligible to make deductible donations
• Specific provisions in trust documents that allow for deductible contributions
• Differences between allowable individual and trust contributions

Learning Objectives

After completing this course, you will be able to:

• Identify changes made to charitable donations under the OBBBA
• Ascertain which types of trusts are eligible to make deductible donations
• Recognize key differences between allowable individual and trust contributions
• Decide the tax effects of gifting appreciated property

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).