White House Mulls Change to Capital Gains Tax

Synopsis: The White House is considering changing the rules for calculating capital gains, allowing taxpayers to adjust the initial value of an asset, such as a home or a share of stock, for inflation when it sells. By increasing the initial value of an asset, the overall capital gains would decrease, thus diminishing the amount of capital gains tax the donor would have to pay when the asset sells.

For More Information: Nonprofits Fear Impact of Trump Administration Plan to Cut Capital-Gains Tax (The Chronicle of Philanthropy)

Why It Matters: Research shows that deductions play an important role in determining the amount of a gift, especially as gift amounts get higher. Reducing the capital gains tax could result in donors lowering the amount they give.

What to Do: AFP encourages chapters to let their members know about the proposal. However, if the White House pushes to enact the proposal with Congressional approval, many believe the move would be challenged in the courts. AFP will continue to monitor this situation.