Clarifying Charitable Caryovers

[Erinjoe21]

For several years now I have been giving money to two different charities. Each year the taxes were filed under the standard deduction. Are those donations from previous years unusable in the current year.

For example: All donations are money. 

Donations made in 2020: $2000 (current filing)

Donations made in 2019: $2000  (Filed under standard deduction not itemized)

Donations made in 2018: $2000  (Filed under standard deduction not itemized)

[jtax]

Probably not. The carryover provisions only apply if your contribution amount is larger than various limits based on income. There are several such limits but they are all about half of your income. So if you have $100k of AGI and give away $60k of 50% AGI limit, you can only deduct up to $50k in the donation year, but can carryover the next $10k.

26 CFR 1.170A-10(a)(2) does say that you can still carryforward if you took the standard deduction, but only to the extent that, independent of the standard deduction, your contribution would have been limited.

https://www.law.cornell.edu/cfr/text/26/1.170A-10

"The carryover provisions apply with respect to contributions made during a taxable year in excess of the applicable percentage limitation even though the taxpayer elects under section 144 to take the standard deduction in that year instead of itemizing the deduction allowable in computing taxable income for that year."

[Erinjoe21]

What do they mean that my contributions would have limited?

[jtax]

The limit they are talking about is 50% of your adjusted gross income (AGI). (for donations to public charities. some private foundation contributions are limited to 30% of AGI). (For 2020 the limit is 100% of AGI because of the pandemic CARES Act.)

So if you have an AGI of $40k and make contributions to a public charity of $30k in that year (except 2020), your deduction is limited to $20k (50% of $40k).  You get a $10k carryover.

If in that year you took the standard deduction, that means you did not actually take an itemized deduction for the $20k of allowable deduction. What I quoted says you can still use the $10k carryover in later tax years.

This probably doesn't apply to you. It doesn't seem likely that $2k annual contributions will be over your AGI for those years. Your AGI would need to be less than $4k in those years, which doesn't seem likely. In that case you wouldn't need to file and probably wouldn't have any tax liability.