Tax Policy For Nonprofit Organizations
Various tax provisions and incentives are critical to the financial sustainability of the performing arts industry.
IRA Charitable Rollover Provision
The Emergency Economic Stabilization Act of 2008 reinstated the IRA Charitable Rollover Provision through December 2009, allowing individuals age 70 ½ and older to make charitable gifts from their IRAs tax-free, up to a total of $100,000 per year. The IRA Charitable Rollover Provision (H.R. 1250), reintroduced by Reps. Earl Pomeroy (D-SD) and Wally Herger (R-CA) would make the provision permanent, lower the qualifying age to 59½ and older, and remove the $100,000 cap. A companion bill (S. 864), was introduced in the Senate by Sen. Byron Dorgan (D-ND) this legislative session and both bills continue secure co-sponsors in an effort to seek passage.
Currently, two competing bills on estate tax are being considered in the House:
- The Certain Estate Tax Relief Act of 2009 (H.R. 436), introduced by Rep. Earl Pomeroy (D-SD) aims to restore the tax on estates and generation-skipping transfers and the step-up in basis provisions for property acquired from a decedent, previously repealed by the Economic Growth and Tax Relief Reconciliation Act of 2001.
- The Estate Tax Relief Act of 2009 (H.R. 3905), introduced by Rep. Shelley Berkley (D-NV) seeks to amend the Internal Revenue Code of 1986 to repeal the 1-year termination of the estate tax, to increase the estate and gift tax unified credit, and to coordinate a reduction in the maximum rate of tax with a phaseout of the deduction for State death taxes.
Artist Fair Market Value Deduction
In 1969, Congress repealed legislation allowing artists, writers, and composers to take a fair‐market value deduction for their works donated to a museum, library or archive, resulting in a dramatic decline in donated works. The Artist-Museum Partnership Act (S. 405), introduced by Senator Patrick Leahy (D-VT), would reinstate the fair‐market value deduction, and would include as qualified charitable contributions "musical, artistic, or scholarly compositions," alleviating unfair tax burdens on artists. Currently, a companion bill (H.R. 1126) in the House was introduced by Rep. John Lewis (D-GA), with the support of Todd Platts (R-PA), co-chair of the Congressional Arts Caucus.