(1) The credit allowed the corporation, partnership, limited liability company, estate, trust, or individual tax liability for a contribution of a planned gift is the percentage, as shown in the following table, of the present value of the allowable contribution as defined in ARM 42.4.2701. The credit allowed against the corporation, partnership, limited liability company, estate, or trust for a direct contribution is equal to 20% of the charitable contribution. The maximum credit that may be claimed in one year is $10,000 per donor. A contribution made in a previous tax year cannot be used for a credit in any subsequent tax year.

 

Planned Gifts by Individuals or Entities

Planned Gift Date; Credit	Present Value Percent of Present Value	Used to Calculate Maximum	Maximum Credit Per Year
1/1/97 - 12/31/01;	50%	$20,000	$10,000
1/1/02 - 8/27/02;	40%	$25,000	$10,000
8/28/02 - 6/30/03;	30%	$22,000	$ 6,600
7/1/03 - 12/31/13	40%	$25,000	$10,000

(2) The credit allowed against the corporate, estate, trust, or individual tax liability for a charitable gift made by a corporation, small business corporation, estate, trust, partnership, or limited liability company directly to a qualified endowment is the percentage, as shown in the following table, of the allowable contribution as defined in ARM 42.4.2701.

Non-Planned Gifts by Eligible Entities

  

Qualified Charitable Gift Date	Percent of Allowable Contribution	Allowable Contribution Used to Calculate Maximum Credit	Maximum Credit Per Year
1/1/97 - 12/31/01	50%	$20,000	$10,000
1/1/02 - 8/27/02	20%	$50,000	$10,000
8/28/02 - 6/30/03	13.3%	$49,624	$ 6,600
7/1/03 - 12/31/13	20%	$50,000	$10,000

 

(3) The balance of the allowable contributions not used in the credit calculation may be used as a deduction subject to the limitations and carryover provisions found in 15-30-2131, MCA, or for corporations the limitations and carryover provisions found in 15-31-114, MCA.

(a) Examples of Allowable Deductions When a Planned Gift is Used for the Qualified Endowment Credit:

Time Period	Present Value	Maximum Credit	Credit Percentage	Allowable Deduction
1/1/97 - 12/31/01	$50,000 -	($10,000	/ .50) =	$30,000
1/1/02 - 8/27/02	$50,000 -	($10,000	/ .40) =	$25,000
8/28/02 - 6/30/03	$50,000 -	($ 6,600	/ .30) =	$28,000
7/1/03 - 12/31/13	$50,000 -	($10,000	/ .40) =	$25,000

 

(b) Examples of Allowable Deductions When an Outright Gift is Used for the Qualified Endowment Credit:

Time Period	Market Value	Maximum Credit	Credit Percentage	Allowable Deduction
1/1/97 - 12/31/01	$50,000 -	($10,000	/ .50) =	$30,000
1/1/02 - 8/27/02	$50,000 -	($10,000	/ .20) =	$ -0-
8/28/02 - 6/30/03	$50,000 -	($ 6,600	/ .133) =	$ 376
7/1/03 - 12/31/13	$50,000 -	($10,000	/ .20) =	$ -0-

 

(4) A contribution to a qualified endowment by a small business corporation, partnership, or limited liability company qualifies for the credit only if the entity is carrying on a trade or business or rental activity.

(5) The contribution to a qualified endowment from a small business corporation, partnership, or limited liability company is passed through to the shareholders, partners, or members in the same proportion as their distributive share of the entity's income or loss for Montana income tax purposes. The proportionate share of the contribution passed through to each shareholder, partner, or member becomes an allowable contribution for that donor for that year, and the credit allowed and the excess contribution deduction allowed are calculated as set forth in (1) and (2). The credit maximums apply at the corporation and individual levels, and not at the pass-through entity's level for partnerships, small business corporations, and limited liability companies.

(6) Deductions and credit limitations for an estate or trust are as follows:

(a) if an estate or trust claims a credit based on the computation of the full amount of the contribution, there is no credit available to beneficiaries;

(b) any portion of a contribution not used in the calculation of credit for the estate may be passed through to the beneficiaries, in the same proportion as their distributive share of the estate's or trust's income or loss for Montana income tax purposes; however, beneficiaries may deduct only that portion of allowable contributions not used toward the credit or deduction claimed by the estate or trust; or

(c) if the estate or trust has deducted the full amount of the contribution, the credit may not be claimed by either the estate, trust, or the individual beneficiaries.

(7) At no time can a corporation, small business corporation, partnership, limited liability company, estate, trust, or individual be allowed to receive the benefit of both a contribution deduction and a credit from the same portion of a contribution.

(8) The maximum credit that may be claimed in a tax year by any donor for allowable contributions from all sources is limited to the maximum credit stated in (1) and (2). In the case of a married couple that makes a joint contribution, the contribution is assumed split equally. If each spouse makes a separate contribution, each may be allowed the maximum credit as stated in (1) and (2).

(a) Example 1: Assume a married couple makes a joint planned gift to a qualified endowment on September 1, 2008. The allowable contribution made by the couple is $30,000. That couple is eligible to take a credit of up to $12,000, with each claiming a credit of $6,000.

(b) Example 2: Assume a married couple makes separate planned gifts to qualified endowments on September 1, 2008, which result in an allowable contribution of $20,000 for each person. They each would be eligible to take a credit of up to $8,000.

(9) A donor may, at a later date, name or substitute the Montana qualified endowment, as defined in 15-30-2327, MCA, to receive the planned gift provided that the original trust or gift document reserves in the donor the right to do so.