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Annette Nellen, co-editor of the South-Western Federal Taxation Series

A bipartisan group of senators presented the Universal Giving Pandemic Response Act on June 22, 2020 (press release by Senator Lankford). This bill would increase the $300 maximum charitable contribution deduction temporarily increased by the CARES Act (P.L. 116-136, 3/27/20). This deduction is available for individuals who don’t itemize their deductions, as with the CARES Act changes. S. _____ doesn’t limit donations to cash, unlike the CARES Act provision.
S. ____ would allow for a one-third increase in the standard deduction amount, and it will be effective for 2019/2020. Individuals may also choose to treat charitable donations made after December 31, 2019, and before July 15, 2020, as if they were made in calendar year 2019. Similar proposals have been made in the past. This is likely because an individual may want to make a charitable donation after they have completed their tax return. They can then see the tax impact of the donation.

Prepare a table listing the maximum donation amounts above-the-line for 2020 for each filing status.
Students should critique the proposal using principles of good tax policies as laid out in Chapter 1, and here. How can they use the results in support of a position for or against S. ______?
Do you think the bill should be limited to donations for COVID-19 relief, given its name? Explain.
What are the complications for taxpayers who donate non-cash items instead of cash?
What due diligence procedures should a tax professional have in place to ensure that donations made between 12/31/19 & 7/15/20, which the taxpayer chooses to deduct from their 2019 return, are not also deducted from the 2020 return?
What documentation is required for a person who donates $300 to the Red Cross
Send a letter to each client explaining S. ______ and the benefits of this tax break.

SWFT Chapters

Chapters 1 and 10, SWFT Individuals
SWFT Comprehensive: Chapters 1, 10
Chapters 1 and 10, SWFT Essentials

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