Salt workaround

[Therrell123]

Any way to get around or countact salt

[New York Enrolled Agent]

Well if you find a way to outfox §164(b)(6) of the Internal Revenue Code, please let us know.

[belle]

Many, many states attempted to circumvent SALT; none were successful.

[David1980]

New York created the New York State Charitable Gifts Trust Fund. https://www.tax.ny.gov/research/stat...-tcja-2017.htm

The idea being you would receive a tax credit on the NY return for your charitable contribution. The charitable contribution being deductible on the federal tax return and not subject to the $10,000 limit.

Some other states have done similar workarounds.

In August there were proposed regulations that would require reducing the charitable contribution for any state credit received. https://www.irs.gov/newsroom/treasur...al-tax-credits

I'm not aware of anything more recent than that, though I have not researched this issue in depth either.

[Burke]

New York created the New York State Charitable Gifts Trust Fund. https://www.tax.ny.gov/research/stat...-tcja-2017.htm

The idea being you would receive a tax credit on the NY return for your charitable contribution. The charitable contribution being deductible on the federal tax return and not subject to the $10,000 limit.
Some other states have done similar workarounds..

It does not appear that this NYSCGTF has anything to do with state and local income tax deductions (SALT).

[David1980]

It does not appear that this NYSCGTF has anything to do with state and local income tax deductions (SALT).

It was made as a work around - that is it's purpose.

Say for example you would owe $27,000 tax to NY state. If you paid $27,000 in one year you would be limited to deducting $10,000 on your federal income tax under the $10,000 SALT limitation.

What they did was added a charitable fund that provides an 85% tax credit. Say you donated $20,000 to the fund. You would get a $17,000 tax credit reducing your state tax to $10,000 and thus staying below the $10,000 limitation. The $20,000 donation being a deductible charitable contribution not subject to the $10,000 limitation giving you $30,000 of deduction on the federal return.

At least before those August proposed regulations.

[David1980]

So how exactly do NY State et al get around the long-standing IRS requirements for a qualifying "charitable deduction" where it would appear some personal benefit ( = reduction in income tax, in your example $17k ) has been derived??

FE

State credits for donations to a charity is nothing new and existed far before the $10,000 SALT limitation existed. See Chief Counsel memorandum 1105010 from 2011.

https://www.irs.gov/pub/irs-wd/1105010.pdf

[New York Enrolled Agent]

State credits for donations to a charity is nothing new and existed far before the $10,000 SALT limitation existed. See Chief Counsel memorandum 1105010 from 2011.

https://www.irs.gov/pub/irs-wd/1105010.pdf

I think you're comparing an apple to an orange. This is 2019 - post TCJA. The memo clearly states it is not intended as guidance - only as a limited answer.

Accordingly, in the instant case Taxpayers may take a § 170 deduction