TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, May 24, 2018

Gamage: Charitable Contributions In Lieu Of State & Local Tax Deductions

David Gamage (Indiana), Charitable Contributions in Lieu of SALT Deductions, 87 State Tax Notes 973 (Mar. 12, 2018):

State governments are considering new charitable tax credits designed to circumvent the 2017 federal tax overhaul’s cap on state and local tax deductions. Will these plans work?

This essay argues that the answer is: yes, but with some qualifications.

Scholarship, Tax | Permalink


There's a problem with substance over form on the state tax credits, and now the IRS is on it. Watch for claims against tax advisors who got clients into these if the credit is treated the same as taxes but with fifteen percent kept for "charitable" purposes. >> "IRS may have just poured cold water on state efforts to skirt SALT deduction cap"

But, "fixing" the matter may require Congress rather than the IRS, as similar credits have been allowed in the past. >> "SALT/Charitable Workaround Credits Require a Broad Fix, Not a Narrow One"

Posted by: Woody | May 24, 2018 12:48:02 PM

Since Notice 2018-54 was issued, this would seem to be resolved.

Posted by: Tom N. | May 24, 2018 6:55:51 PM

I would have thought there would be more discussion of the irony of those state politicians who complain about the rich trying to skirt tax laws unabashedly trying to skirt tax laws, and of the same politicians saying that the tax law is slanted toward the wealthy creating a new "deduction" that is slanted toward the wealthy.

Posted by: Steve | May 25, 2018 11:22:58 AM