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Friday, October 28, 2005

NY Times: Katrina Tax Package Provides Boon to Charities

Tax_news_roundup_17 New York Times (Stephanie Strom):  In Hurricane Tax Package, a Boon for Wealthy Donors:

A little-noted provision in the tax relief package to aid victims of Hurricane Katrina is shaping up as a windfall for charity and a drain on government coffers. It allows donors who make cash gifts to almost any charity by the end of this year to deduct an amount equal to virtually 100% of their adjusted gross incomes, double the normal limit of 50% of income. The tantalizing prospect has set off a financial scramble among some wealthy donors and charities vying for their dollars....

Not all charities are rushing to take advantage of the provision. "You don't want to appear to be greedy or inappropriate," said Arthur J. Ochoa, senior vice president for community relations at Cedars-Sinai Medical Center in Los Angeles. "The legislative intent was drawn more broadly, but if you asked members of Congress what they were voting for, they would say relief for the Katrina victims....

Christopher R. Hoyt, a professor of tax law at the University of Missouri-Kansas City, said donors also needed to consider their state tax liability because some states did not allow charitable deductions that were allowed at the federal level. "I suspect this will produce relatively few additional gifts," Mr. Hoyt said, "but of much bigger dollars."

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