LA tuition donation tax credit

reminds me of the conservation easement credits that some of my friends buy for federal taxes

We are looking hard at this for some of our clients.

We know for a fact that LDR is going to require the amount of the charitable deduction to be an addback on LA Schedule E. On a $10,000 donation, that would increase your LA tax by $600. Not a huge issue, but something to consider.

Note: This is based on conversations many practicioners have had with LDR's policy people. I have not seen any published guidance.

I can also tell you that there is a significant concern that the IRS will consider the tax credit "a thing of value". Charitable contributions deduction must be reduced by items of value that are received from the charity. This wasn't an issue pre-2018 since really, even if there was an issue with the charitable deduction, the credit could have been taken as a tax payment... so it was just a matter of what Sch A line to use.

With the 10K Sch A tax limitation... all of these "work-arounds" are getting a very close look.

You might be able to sneak it through in 2018, so there is a small window.

Now, even if the IRS does eventually limit the deduction to 5%, you still get that... and you also get the satisfaction of knowing that your tax dollars are going to a mission you believe in, instead of being pissed away by Baton Rouge. That, by itself, may make this program popular!!