FERGUSON, SÁNCHEZ INTRODUCE BIPARTISAN BILL TO ALLOW TAX DEDUCTIONS FOR EXPENSES RELATED TO FUNERAL AND CEMETERY TRUSTS

Below is a press release from Georgia Congressman Drew Ferguson.

Congressman Drew Ferguson (R-GA) and Congresswoman Linda T. Sánchez (D-CA) recently introduced legislation that would restore appropriate tax deductions for advisory expenses related to funeral and cemetery trusts. 

“From my time as a mayor, I understand firsthand the financial responsibility that goes along with maintaining community cemeteries,” said Congressman Drew Ferguson. “During a time of immeasurable loss, families shouldn’t be burdened with their loved ones’ final resting place which is why the solvency of funeral trusts is immensely important. Families, funeral homes, and local governments deserve our support when making financial decisions to preserve our local cemeteries.”

“When families lay their loved ones to rest, memorials offer a place to remember those they’ve lost, and should be properly cared for from generation to generation. The inability to deduct certain expenses related for burial costs has threatened the financial solvency of the trusts that must fulfill that sacred obligation to families,” said Congresswoman Linda Sánchez. “When trusts are no longer able to cover needed upkeep, cash-strapped state and local governments are often ultimately on the hook for their fiduciary responsibility. This bill would enable the trusts to retain more income, so cemetery authorities and funeral homes can carry out their duties and meet the needs of those already struggling with grief.”

The loss of the deduction option has been particularly impactful to the deathcare industry because funeral homes and cemeteries utilize trusts uniquely from traditional trusts where funds are provided to a beneficiary. Despite the lower tax rates authorized for trusts under the TCJA, many cemetery and funeral trusts are now paying more in taxes because the taxable income of many trusts is now higher without the deduction. 

Additionally, this bill would finally increase the distribution deduction for care and maintenance and index that figure for inflation. Internal Revenue Code Section 642(I) allows such trusts a $5 per gravesite distribution deduction for each gravesite purchased prior to the start of the taxable year for which care and maintenance are provided. However, since its creation in 1976, the $5 distribution deduction has never been increased in value or indexed for inflation. As a result, the value is greatly diminished from what it was 45 years ago, and in today’s dollar, would be nearly five times higher. 

This bill would enable the trusts to retain more income, so cemetery authorities and funeral homes can carry out their duties and meet their contractual obligations. 

You can view the full bill text here.