The Internal Revenue Service clarified that businesses that donate to charitable funds in exchange for a state tax credit can deduct those costs from their federal tax returns, according to a proposal issued Friday.
The guidance is an attempt to resolve confusion about how the donations are treated, following changes to how the IRS treats tax benefits from donating to state charitable funds. The regulations also provide a safe harbor for some individuals who donate to these charitable funds for a tax credit.
Corporations and pass-through entities can take the deduction for their donations, the IRS said in its guidance. ...
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