Preserving Charitable Incentives Act

Bill: 116-hr-8817
Sponsor: full_name: Rep. Panetta, Jimmy [D-CA-20]
Introduced: 2020-11-24
Policy area: Taxation
Subjects: Administrative law and regulatory procedures

Charitable contributions

Department of the Treasury

Income tax deductions
Latest action: action_date: 2020-11-24
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2020-11-24
action_desc: Introduced in House
text: <p><b>Preserving Charitable Incentives Act</b></p> <p>This bill increases the cap for corporate charitable tax deductions from 25% to 100% of a corporation's taxable income for taxable years beginning in 2020 and 2021. This increase encourages corporate donors (e.g., restaurants and retailers) to donate excess inventory rather than destroying it. The bill allows a carryover of excess inventory into the succeeding taxable year.</p> <p>The bill also directs the Department of the Treasury to revise regulations with respect to the treatment of inventory as costs of goods sold for purposes of the charitable tax deduction.</p>

tv_txt: I 116th CONGRESS 2d Session H. R. 8817 IN THE HOUSE OF REPRESENTATIVES November 24, 2020 Mr. Panetta (for himself and Mr. Smith of Nebraska ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide incentives to make charitable contributions of certain inventory.

1. Short title This Act may be cited as the Preserving Charitable Incentives Act . 2. Incentives to make charitable contributions of certain inventory (a) Temporary increase in limitation on qualified contributions (1) Suspension of current limitation Except as otherwise provided in paragraph (2), qualified contributions shall be disregarded in applying subsections (b)(2), (d), and (e)(3)(C)(ii) of section 170 of the Internal Revenue Code of 1986. (2) Application of increased limitation For purposes of section 170 of the Internal Revenue Code of 1986— (A) Limitation Any qualified contribution shall be allowed as a deduction only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer’s taxable income (as determined under paragraph (2) of section 170(b) of such Code) over the amount of all other charitable contributions allowed under such paragraph. (B) Carryover If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(2) of such Code) exceeds the limitation of subparagraph (A), such excess shall be appropriately taken into account under section 170(b)(2) of such Code subject to the limitations thereof. (C) Carryover of food inventory contributions If the aggregate amount of qualified contributions described in section 170(e)(3)(C)(i) of such Code made in such contribution year exceeds the limitation of subparagraph (A), such excess shall be appropriately taken into account under section 170(e)(3)(C)(iii) of such Code subject to the limitations thereof, and the application of subparagraph (B) shall be adjusted accordingly. (3) Qualified contributions For purposes of this subsection, the term qualified contribution means any qualified contribution (as defined in section 170(e)(3)(A) of the Internal Revenue Code of 1986) which— (A) is made during a taxable year of the corporation which begins during 2020 or 2021, and (B) does not consist of any drug or biological product that requires a prescription of a physician for its use by an individual. (4) Election A contribution shall be taken into account as a qualified contribution for purposes of this subsection only if the corporation elects (at such time and in such manner as the Secretary may provide) the application of this subsection with respect to such contribution. (b) Election To treat qualified contributions as made in prior taxable year In the case of any qualified contribution (as defined in subsection (a)(3) and determined without regard to this subsection) made during the corporation’s first taxable year beginning in 2020 with respect to which the corporation elects (as such time and in such manner as the Secretary may provide) the application of this subsection— (1) such contribution shall be treated as made in the taxable year preceding such taxable year (and not in such taxable year), and (2) such contribution shall not be treated as a qualified contribution for purposes of subsection (a). (c) Clarification of treatment of inventory costs The Secretary of the Treasury, or the Secretary’s designee, shall clarify, though a notice or other administrative guidance, the treatment of inventory costs as cost of goods sold for purposes of section 170 of the Internal Revenue Code of 1986.