July 16, 1998 | Read Time: 1 minute
Donors who want to use appreciated stock to set up or supplement private foundations are keeping their fingers crossed that Congress will soon vote to renew and make retroactive a key tax benefit that recently expired. Until June 30 of this year, donors could deduct the full market value of appreciated stock they gave to foundations. But as of July 1, such donors are allowed to deduct only the amount they originally spent to buy the stock.
Key members of Congress, including House Ways and Means Chairman Bill Archer, say they plan to renew the break and make it retroactive to July 1. They expect to tuck the stock-gift extension into a larger tax-relief bill in coming weeks.
But some observers worry that Congress may fail to enact tax legislation this year, which could leave foundation donors out in the cold.
Until a retroactive break is enacted into law, many potential contributors to funds are holding off making their gifts, just as they did during other times that the tax benefit has lapsed, says Anne H. Babcock, director of legislative affairs at the Council on Foundations. Donors are hesitant to gamble that the break will be renewed and made retroactive, says Ms. Babcock. “What’s happening is that foundations are not getting created,” she says.
Ms. Babcock says she is hopeful that Congress will eventually pass the provision, which President Clinton has endorsed. “The question,” she says, “is how and when.”
