Congress Passes Charitable Deduction Extension for Tsunami Donations

Shortly after the 109th Congress commenced, tax writers wasted no time in passing the first piece of tax legislation in 2005. Both the House and Senate passed a bill (H.R. 241) on January 6 that permits accelerated tax deductions for charitable cash donations made to assist victims of the recent tsunami in the Indian Ocean. Specifically, the bill allows taxpayers to claim a tax deduction in tax year 2004 for donations made for tsunami disaster relief until January 31, 2005. Under current law, taxpayers would have to wait until next year’s filing season to claim a tax deduction for tsunami-related gifts made after December 31, 2004. The proposal is limited to cash gifts made specifically for disaster relief. The President signed the bill into law on January 7, 2005.

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