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Abstract: 

Taxpayers understandably want to obtain the greatest possible tax benefit from their deductible expenditures, including charitable contributions. One limitation on deductibility has been referred to as the “infamous” Pease limitation, which imposes an overall limit on itemized deductions for individuals whose adjusted gross income (AGI) exceeds the “applicable amount.” This article examines the application of this limitation in planning year-end charitable contributions while preserving the tax benefit arising from the contribution. Includes five short case studies illustrating various filing statuses, AGI, and possible deductions.

Keywords: 3%/80% Rule

Affiliations:  1: Strasburger & Price, LLP.