In the new tax reform legislation, the adjusted gross income limitation on cash contributions will increase from 50% to 60%, for contributions made after 2017 and before 2026. There will no longer be an 80% deduction for contributions made to obtain university athletic seating rights, effective for contributions made after 2017.
The individual standard deduction will increase to $24,000 for joint returns and $12,000 for single returns. Because of the increase, many taxpayers may find that they will no longer itemize deductions, in which case, charitable contributions will not be separately deducted.
For tax exempt organizations who have unrelated business income, the bill provides that each separate unrelated business is separately calculated. Losses from one business will not be allowed to offset income from another business.
The bill will impose a 21% excise tax on exempt organization executive compensation in excess of $1 million, for the top highest paid employees, excluding certain parachute payments.
Several excise tax proposals in the House bill were not enacted in the final legislation.
Certain private colleges and universities will have a 1.4% excise tax on investment income. These institutions must have more than 50% of their tuition paying students located in the US, have more than 500 tuition-paying students, and have assets of at least $500,000 per full-time student.
No changes were made to the “Johnson Amendment”, which limits political activity by charitable organizations.