Current through Register 1531, September 27, 2024
(1)
Statement of Purpose, Effective Date, Outline of
Topics.
(a)
Statement of Purpose. 830 CMR 62.3.2 explains the
application of the charitable contribution deduction allowed by M.G.L. c. 62,
§ 3 (B)(a)(13).
(b)
Effective Date. 830 CMR 62.3.2 shall be effective for
tax years beginning on or after January 1, 2001.
(c)
Outline of
Topics. 830 CMR 62.3.2 is organized as follows:
1. Statement of Purpose
2. Definitions
3. Qualifying Contributions
4. Amount Deductible
5. Income Subject to Deduction
6. Carryover
7. Part-year Residents,
Nonresidents
8. Entities Taxable
under M.G.L. c. 62
9.
Record-keeping
(2)
Definitions. For
purposes of 830 CMR 62.3.2 the following terms shall have the following
meanings:
Code, the Internal Revenue Code of the
United States, as defined in M.G.L. c. 62, § 1.
Commissioner, the Commissioner of the
Massachusetts Department of Revenue, or the Commissioner's duly authorized
representative.
Taxpayers, individuals taxable under
M.G.L. c. 62 and entitled to take deductions under M.G.L. c. 62, §
3(B).
(3)
Qualifying Contributions. In order to be deductible, a
contribution must be paid on or after January 1, 2001 and meet all the
requirements for deductibility of charitable contributions under Code §
170. An amount representing a charitable contribution may be deducted only
once.
(4)
Amount
Deductible.
(a)
Starting Figure. A taxpayer who itemizes deductions on
his or her federal income tax return for the taxable year shall use as a
starting figure the amount entered on Internal Revenue Service Form 1040,
Schedule A, representing gifts to charity. A taxpayer who does not itemize
deductions on his or her federal income tax return for the taxable year shall
use as a starting figure the amount that would be entered on Schedule A,
representing gifts to charity, following all applicable limits and
requirements, as though the taxpayer were calculating a federal deduction for
gifts to charity. The starting figure is not reduced even if the individual's
federal adjusted gross income exceeds the threshold amount specified in Code
§ 68.
(b)
Amount
for Contributions Made prior to January 1, 2001 and Carried over to the Current
Year on the Taxpayer's Federal Income Tax Return. The
Massachusetts deduction for charitable contributions shall be the amount that
results after any amounts representing charitable contributions made prior to
January 1, 2001 and carried over to the current year on the taxpayer's federal
income tax return are subtracted from the starting figure.
(5)
Income Subject to
Deduction. The Massachusetts charitable contribution deduction is
one of the deductions taken against Part B adjusted gross income to arrive at
Part B taxable income. The deduction cannot be taken against Part A or Part C
income.
(6)
Carryover. If the amount of the Massachusetts
charitable contribution deduction exceeds the taxpayer's Part B adjusted gross
income, the excess may be deducted in the succeeding taxable year. A charitable
contribution deduction amount may be carried over for up to five taxable years
succeeding the taxable year in which the contribution was made, to the extent
it exceeds the taxpayer's Part B adjusted gross income each year.
(7)
Part-year Residents and
Non-residents.
(a)
Part-year Residents. Part-year residents may deduct
the figure that results when they multiply their charitable contribution
deduction, calculated in the same manner as for full year residents under 830
CMR 62.3.2(4), by the part-year resident pro-ration formula, which is the
number of days of Massachusetts residency divided by 365.
(b)
Non-resident
Taxpayers. Non-resident taxpayers may deduct the figure that
results when they multiply their charitable contribution deduction, calculated
in the same manner as for full year residents under 830 CMR 62.3.2(4), by the
fraction representing their income subject to tax in Massachusetts divided by
their total income from all sources. See
830 CMR
62.5A.1(8)(b).
(8)
Entities Taxable under M.G.L.
c. 62. The deduction for charitable contributions under M.G.L. c.
62(B)(a)(13) is not available to entities taxable under M.G.L. c. 62.
(a)
Fiduciaries. All
fiduciary taxpayers that claim a deduction for charitable contributions,
including those that deduct charitable contributions from federal income tax
pursuant to Code § 170, shall deduct qualifying charitable contributions
under M.G.L. c. 62, § 3(B)(a)(2) and not under M.G.L. c. 62 §
3(B)(a)(13).
(b)
Flow-through Entities.
1. Partners take charitable contributions
separately as each partner's distributive share of the partnership's charitable
contribution. (See Code § 702(a).)
2. S corporation shareholders take charitable
contributions separately as each shareholder's share of the S corporation's
charitable contribution deduction. (See Code §
1366(a)(1).)
(c)
Corporate Trusts. Corporate trusts may not claim the
deduction because under M.G.L. c. 62, § 8(a), a corporate trust is not
allowed to claim deductions under M.G.L. c. 62, §
3(B).
(9)
Recordkeeping. Taxpayers claiming the charitable
contribution deduction must follow the record-keeping and substantiation
requirements of Code § 170 and the regulations thereunder, regardless of
whether they itemize charitable contributions on their federal returns.
Taxpayers must keep records to substantiate cash and noncash charitable
contributions. Those who are deducting noncash charitable contributions with a
total value of over $500 must file with the Commissioner a copy of Federal Form
8283 whether or not they itemize for federal tax purposes.
