House approves measure on tax-free IRA charitable distributions

The House of Representatives has approved legislation that would make permanent the rule allowing certain tax-free distributions from IRAs for charitable purposes. The measure, originally approved as a separate bill (H.R. 637) by the House Ways and Means Committee, was included in a bill package that would extend and expand tax breaks for food inventory donations and for land donations for conservation purposes. The Fighting Hunger Incentive Bill of 2015 (H.R. 644) was approved on February 12, 2015, by a vote of 279 to 137.

The IRA provision, if enacted, would apply to distributions made in taxable years beginning after December 31, 2014.

Unlikely to become law

The prospects for the bill becoming law are unlikely as President Obama has said he will veto the measure if it appears on his desk. House Speaker John Boehner (R-OH), however, hoped the President would reconsider his veto threat. “Even in tough times, the generosity of the American spirit has prevailed. I hope the same sense of duty will prevail upon the president, and he will rethink his threat to veto this bipartisan measure,” said Boehner.

House Democratic leaders called the bill, and others like it that have been approved in recent days by the House Ways and Means Committee, the opposite of tax reform. “You don’t do tax reform in a piecemeal fashion,” said Ways and Means ranking member Sander Levin (D-MI), from the House floor. “So many of us are really opposed to what is really a contradictory path here.” House Democratic Whip Steny H. Hoyer (D-MD) said the Republicans’ approach to passing tax-extenders legislation was “bad policy.”

In addition, Levin, commenting in early February as the IRA provision was approved by the House Ways and Means Committee, noted that extending the provisions permanently without paying for their cost would add to the deficit.

Source: H.R. 644.

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