Sec. 112027. 1-percent floor on deduction of charitable contributions made by corporations
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/bill/119/hr/1/pcs/section-112027A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 170(b)(2)(A) is amended to read as follows: Any charitable contribution (other than any contribution to which subparagraph
(B)or subparagraph
(C)applies or any contribution for which a deduction is not allowable under this section without regard to this paragraph) shall be allowed as a deduction under this subsection
(a)only to the extent that the aggregate of such contributions— exceeds 1 percent of the taxpayer’s taxable income, and does not exceed 10 percent of the taxpayer’s taxable income. . Section 170(d)(2) is amended to read as follows: Any charitable contribution taken into account under subsection (b)(2)(A) for any taxable year which is not allowed as a deduction by reason of clause
(ii)thereof shall be taken into account as a charitable contribution for the succeeding taxable year, except that, for purposes of determining under this subparagraph whether such contribution is allowed in such succeeding taxable year, contributions in such succeeding taxable year (determined without regard to this paragraph) shall be taken into account under subsection (b)(2)(A) before any contribution taken into account by reason of this paragraph. No charitable contribution may be carried forward under subparagraph
(A)to any taxable year following the fifth taxable year after the taxable year in which the charitable contribution was first taken into account. For purposes of the preceding sentence, contributions shall be treated as allowed on a first-in first-out basis. In the case of any taxable year from which a charitable contribution is carried forward under subparagraph
(A)(determined without regard this subparagraph), subparagraph
(A)shall be applied by substituting clause
(i)or
(ii)for clause
(ii). The amount of charitable contributions carried forward under subparagraph
(A)shall be reduced to the extent that such carryfoward would (but for this subparagraph) reduce taxable income (as computed for purposes of the second sentence of section 172(b)(2)) and increase a net operating loss carryover under section 172 to a succeeding taxable year. . Subparagraph (B)(ii) and (C)(ii) of section 170(b)(2) are each amended by inserting other than subparagraph
(C)thereof after subsection (d)(2) . The amendments made by this section shall apply to taxable years beginning after December 31, 2025.