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President Signs Haitian Accelerated Deduction Law
January 27, 2010 - Recently, President Obama signed into law H.R. 4462, which allows the accelerated deduction of cash charitable contributions to Haiti. The bill, drafted less than one week after a devastating earthquake rocked the island nation, quickly cleared the House and Senate and became law three days after being introduced.
Taxpayers may elect to treat qualifying contributions made after January 11, 2010 and before March 1, 2010 as if they were made on December 31, 2009. Qualifying contributions are cash contributions made for the relief of victims in areas affected by the earthquake in Haiti on January 12, 2010. Donations deducted on 2009 tax returns cannot be deducted again on 2010 tax returns.
The law specifically allows for the deduction of contributions made through text messaging. Taxpayers need to retain a telephone bill showing the name of the donee organization and the date and amount of the contribution in order to satisfy IRS recordkeeping requirements. Ordinary substantiation rules apply to contributions made by cash, check or credit card.
This law is similar to legislation enacted shortly after the late 2004 Indian Ocean tsunami, which allowed deductions in 2004 for contributions made in January of 2005.
For more information on this law, please reach out to your Rothstein Kass tax advisor.
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