CARES Act - Three Big Changes

Does the above-the-line $300 deduction apply per individual taxpayer or per filing capped at $300? Specifically, would a married couple filing jointly be able to deduct $600?

The text of the CARES Act, H.R. 748, Section 2204(a)(22) states: "In the case of taxable years beginning in 2020, the amount (not to exceed $300) of qualified charitable contributions made by an eligible individual during the taxable year." Eligible individual is defined as "any individual who does not elect to itemize deductions." Based on the language of the statute, it sounds like this benefit is for an individual, rather than per return. More information will be forthcoming from the Joint Committee on Taxation or the Form 1040 Instructions, which will definitively determine if this is per individual or per return.

Is the 100% charitable deduction limit applicable to a gift made to fund a charitable gift annuity? Or does it only apply to an outright gift?

Thank you for your questions! The cash gift charitable deduction limit waiver in the CARES Act is specifically for cash gifts to Sec. 170(b)(1)(A) charities (specifically excluding donor advised funds and supporting organizations). It is best for donors to obtain their own counsel on these topics, because most charities do not provide tax or legal advice. Based on our interpretation, which is subject to change if further guidance is provided on the CARES Act, the intent behind the CARES Act was to generate outright cash gifts to charity. The CARES Act does not expressly prohibit split interest gifts, but there is a lack of clarity on split interest gifts permissibility for the cash gift charitable deduction limit waiver. A charitable gift annuity involves a transfer directly to a charity. Based on that, there is a strong argument that a cash gift to a Sec. 170(b)(1)(A) charity should be considered a cash gift and available for the charitable deduction limit waiver under the CARES Act. On the other hand, Charitable trusts are exempt under other sections of the Code (e.g. Sec. 664), rather than exempt under Sec. 170(b)(1)(A). A cash gift to a charitable trust would not be considered a cash gift to a Sec. 170(b)(1)(A) charity. You may want to run this by your counsel as well to determine if they have an different understanding or interpretation.

The Joint Committee on Taxation issued guidance on April 23, 2020 (JCX-12R-20) regarding the $300 above-the-line deduction. On page 22, they clarify that the $300 above the line deduction applies to a "tax-filing unit. Thus, for example, married taxpayers who file a joint return and do not elect to itemize deductions are allowed to deduct up to a total of $300 in qualified charitable contributions on the joint return."

THOUGHT I believe that the charitable deduction from CGA's Funded with cash meets the CARES Act for the 100% AGI charitable deductionguidelines since the CGA is actually with a public charity. CRUTS and CLTs are separate entities within themselves which creates the challenge for the charitable deduction from cash funded CRUTS and CLTs to meet the guidelines for the 100% AGI charitable deduction when funded with cash.

Thank you for your comment!