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Provide for reconciliation pursuant to title II of H. Con. Res. 14Section 70426 › Proposal

The carryforward is capped at five taxable years

To provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70426, Sec. 70426. Written by .

The carryforward is capped at five taxable years

The document says “may notWho acts: Secretary of the TreasuryHow: statuteSec. 70426 in the PDF
What the document says

“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.”

To provide for reconciliation pursuant to title II of H. Con. Res. 14, Sec. 70426

The section bars a carryforward past the fifth taxable year after the year the contribution was first taken into account, with contributions treated as allowed on a first in first out basis. It also cuts the amount carried forward so far as it would reduce taxable income as computed for the second sentence of section 172(b)(2) and increase a net operating loss carryover.

What the document actually says

“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.”

To provide for reconciliation pursuant to title II of H. Con. Res. 14, Sec. 70426
That sentence, in plain words

A gift may not be carried past a point. That point is the fifth tax year after it was first counted.

What this is about

Older gifts are used first. After five years the rest is lost. A special rule keeps it from building a loss carryover.

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