AUSTIN, Texas (Reuters) – The IRS on Wednesday proposed raising the maximum maximum amount that individuals can sell or give away from $5,000 to $10,000 a year and requiring that companies pay a $250 tax withholding fee for each donation of stock.
The move, which is part of a broader $10 trillion tax overhaul aimed at ending tax evasion, would increase the maximum donation limit to $15,000 and make it mandatory for individuals to report income from stock transactions.
Individuals who have made a gift of $5 or more could potentially be penalized if they fail to disclose their charitable donations to the IRS.
The IRS also proposed revising the maximum allowable deduction for gifts of stock from $2,500 to $2.5 million.
The tax overhaul would also raise the maximum amount of capital gains and dividends that can be taxed as ordinary income.
It would apply only to taxable years beginning after Dec. 31, 2021.
The tax overhaul also would eliminate tax breaks for charitable organizations.
The $5 million limit on gifts would apply to all donations above $2 million.
The $10 million limit would apply, but only if the donation is made in the same year that a business owner is receiving taxable income.
Individual investors who don’t want to report their income as income for tax purposes would still be able to donate money from a charitable donation.
The maximum allowed donation from a tax-exempt charity could be $10.
In addition, the tax plan would reduce the tax break that allowed corporations to deduct charitable donations.
The change would also apply to tax-deferred stock donations.
The change comes after a recent review by the Treasury Inspector General for Tax Administration, which found that the IRS had not fully vetted the tax-deductible charitable contributions that many Americans make.
Under the tax overhaul, the maximum charitable contribution allowed would be reduced to $500 a year for individuals and $250 a year to $5.
The limit would also be reduced for corporations and partnerships, and for limited liability companies, for up to $100 a year.
The new limits for stock donations would not affect the maximum deduction for donations of money to charities, which could be made with up to a $1 million tax deduction.
The Obama administration also proposed reducing the amount of time that individuals could deduct charitable contributions from taxable years, up to 10 years.
In recent years, the government has been targeting individuals who are in the middle of making taxable contributions to charitable groups.
The IRS says it is also reviewing potential changes to the gift tax code that would limit charitable deductions.
The proposal is expected to be submitted to the White House for consideration.