IRS Releases Proposed Regulations Addressing Purported Charitable Contributions in Exchange for State and Local Tax Credits
On August 23, 2018, the IRS released proposed regulations under section 170, which allows deductions for certain charitable contributions. The regulations are in response to plans by some states to circumvent the $10,000 deduction limitation for state and local taxes imposed by the Tax Cuts and Jobs Act by offering tax credits for contributions to certain government programs. The proposed regulations generally deny a deduction for such contributions.
Read more: REG-112176-18; Treasury Issues Crackdown on State and Local Tax Workarounds