Summer topics for professional advisors worth watching

Posted on June 19, 2023

With summer season underway, now is the time for professional advisors to stay ahead of the game by keeping a close eye on three key topics that could impact their charitable clients this year. 

1. Proposed legislation known as the Charitable Act is gaining momentum. The bill calls for making a "below the line" deduction available to taxpayers who do not itemize on their tax returns. This proposed deduction is slated to reach up to one-third of the standard deduction (around $4,500 for an individual filer and around $9,000 for married joint filers). In addition to providing an overall boost to charitable giving, enabling all taxpayers to benefit from the charitable deduction might help reverse the decline in recent years in the number of households giving to charity each year.

2. Qualified Charitable Distributions (QCDs) are having a moment, thanks to new laws passed late last year that expand this unique charitable giving opportunity for those 70 ½ or older. Watch out, though, for potential pitfalls. As a recent legal analysis points out, the devil is in the details, especially concerning the new "Legacy IRA" provisions allowing eligible taxpayers to make a one-time QCD to a charitable remainder trust or charitable gift annuity.   

3. If you are an advisor who counsels nonprofit organizations, take note: a recent private letter ruling reinforced once again that the IRS takes the concept of "private inurement" very seriously for nonprofits. As in, if you do it, you're out. Most nonprofits know that they will put their 501(c)(3) exemption status at risk if they play fast and loose with the rules for preventing undue benefit to a private person. After all, charities are established for the public good, and public good and private profit do not mix. 

*This blog post is provided for informational purposes only, and is not intended as legal, accounting or financial planning advice.

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