"A $6.1 billion tax-relief bill to aid in recovery from Hurricane Katrina cleared Congress, amid laments over the deficit but no clear direction from Republicans beyond creating World War II styled bonds to finance the debt from the disaster," the Wall Street Journal reports. "The House gave its approval on a 422-0 vote, and the Senate sent it on to President Bush for his signature last night without a roll call." INCENTIVES FOR CHARITABLE DONATIONS:

• Encourages cash donations by individuals. Under current law, individuals may deduct charitable donations up to 50 percent of their adjusted gross income. Deductions for charitable donations are further limited by the phase-out of itemized deductions. Under the proposal, cash donations to charities are exempt from the 50-percent income limitation and the phase-out of itemized deductions if the donations are made before January 2006.
• Encourages cash donations by corporations. Under current law, corporations may deduct charitable donations up to 10 percent of their taxable income. The proposal waives the 10-percent income limitation for cash donations related to Hurricane Katrina if the donations are made before January 2006.
• Modifies tax treatment when using a personal vehicle for charitable work. Under current law, individuals may claim a tax deduction for the costs associated with using a personal vehicle for charitable work. The deduction is calculated by using a mileage reimbursement rate of 14 cents-per-mile. The reimbursement rate for business use is set periodically through IRS guidance and currently stands at 48.5 cents-per-mile. The proposal sets the mileage reimbursement rate for charitable contributions at 70 percent of the standard business mileage rate. If the individual is a volunteer and is reimbursed for the use of the personal vehicle, the proposal ensures that the individual does not have to pay income tax on the reimbursement. Both provisions are effective through December 31, 2006.
• Encourages charitable donations of food inventory. Under current law, C-corporations may deduct the cost of food inventory donations. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value. The proposal extends the current-law deduction for food donations to S-corporations, partnerships and sole proprietors through the end of the 2005 calendar year.
• Encourages donations of educational books to public schools. The proposal allows a charitable deduction through the end of the 2005 calendar year for donations of educational books to public schools. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value.

The IRA Rollover has been jettisoned. For a summary of the legislation that has been sent to the president.