Comments on Proposed Regulations: 'Contributions in Exchange for State or Local Tax Credits' (Reg-112176-18)

11 Pages Posted: 3 Oct 2018  

Lawrence Zelenak

Duke University School of Law

Date Written: September 6, 2018

Abstract

These comments offer three recommendations, of which only the first involves a change in the proposed regulations themselves. First, rather than treating state tax credits as an exception to the general rule that a charitable deduction is not reduced by benefits a donor receives from third parties, the final regulations should set forth a general rule that the amount of a charitable deduction is reduced by benefits a donor receives from any source on account of the donation. Second, the preamble to the final regulations should clearly state that SALT ceiling workarounds (involving purported donations to the states themselves) would not be effective under well-established substance-over-form principles, even in the absence of new regulations. Finally, the analysis in Example 2 (in the Special Analyses, not in the proposed regulations themselves) should be revised to reflect the application of substance-over-form principles to state tax credits for contributions to the states themselves.

Keywords: Charitable Deduction, SALT Deduction, Proposed Regulations, Tax Cuts and Jobs Act

JEL Classification: K34

Suggested Citation

Zelenak, Lawrence A., Comments on Proposed Regulations: 'Contributions in Exchange for State or Local Tax Credits' (Reg-112176-18) (September 6, 2018). Available at SSRN: https://ssrn.com/abstract=3247689

Lawrence A. Zelenak (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
54
rank
350,596
Abstract Views
154
PlumX