Monday, December 21, 2015

Two Tax Breaks for the Well-Heeled

On the morning of Friday, December 18, the President signed the major tax and spending bill passed by a remarkably compliant Congress. (The legislation, the NY Times explained, "showed just how easily a fractious legislature can seem functional again when there is agreement to spend more money....")

Not until 5:21 P.M. did the email from my Alma Mater arrive.
Make a Tax-Free Gift from your IRA: 
Congress passed legislation that would extend the Charitable IRA Rollover incentive for gifts completed in 2015 and future years…. The law allows individuals age 70 1/2 and older to make qualified charitable distributions of up to $100,000 each year from their traditional or Roth IRAs directly to charities…. While you cannot claim a charitable deduction for an Charitable IRA Rollover, this distribution from your IRA counts towards your minimum required distribution and will not be treated as taxable income.
What took them so long?

The renewed exemption for charitable transfers from IRAs is "permanent." That's tax speak for "at least the next few years."

Another tax break, another show

Also of interest to high-net-worthers, kinder tax treatment for investments in Broadway shows. For instance, show-biz investors no longer will be taxed on “phantom profits,” money returned to investors that is less than the amount they had initially invested.

Everybody knows that investing in Broadway shows is a loser's game. But then, who knew Hamilton would be a smash hit?

1 comment:

Jim Gust said...

"That's tax speak for "at least the next few years.""

Although I agree with your assessment that tax law is never really permanent, I think a more accurate reading would be that it's tax speak for "no expiration date." Which is a very big deal.

Making most of the extenders "permanent" so as to head off annual discussions of new taxes to "pay for" extensions every year was actually a real achievement of this Congress--perhaps the only one.