As the tax-code debate heats up this election season, one
cherished break for taxpayers in upper brackets—the deduction for charitable
contributions—is under fire according to the Wall St Journal.
Not only are tax overhaulers on both sides of the
congressional aisle taking aim, but so are both presidential candidates.
That means well-heeled donors should consider whether to
accelerate donations planned for future years into 2012, while the tax
treatment is still favorable. "We're raising this question with all our
clients," says Beth Kaufman, an attorney at Caplin & Drysdale in
Washington.
The threat is shining a new spotlight on "donor-advised
funds," which allow donors to donate now and deduct at current tax rates,
while making the charitable gifts later. In effect, they are miniature versions
of private foundations—but without the considerable expenses or hassles. They
also are a rare example of a tax-favored vehicle that can work equally well for
the wealthy and the merely affluent….
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