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Proposed IRS Rules Would Curb Avoidance of SALT Deduction Limit

August 29, 2018

Under proposed regulations issued by the U.S. Internal Revenue Service (IRS), transfers to a state agency or charitable organization in lieu of paying state and local taxes would be deductible as a charitable contribution only to the extent that the taxpayer making the donation did not receive a quid pro quo (REG-112176-18). Contributions that result in a state or local tax credit in return for the contribution would not be deductible for federal tax purposes to the extent of the credit; however, contributions that result in a state or local tax deduction may be deductible for federal tax purposes. Click here for more information.