As its name implies, a bargain sale occurs when a donor, who intends to make a charitable contribution, sells property to charity for less than its fair market value. This memorandum reviews the various types of bargain sales, the technical requirements for qualification, taxation of bargain sales, computation of charitable contribution deductions, and the application of the bargain sale rules to various types of planned giving vehicles.  MORE »

Charitable lead trusts ("CLTs") are designed to provide income payments to at least one qualified charitable organization for a period measured by a fixed term of years, the lives of one or more individuals, or a combination of the two; after which, trust assets are paid to either the grantor or to one or more noncharitable beneficiaries named in the trust instrument. This comprehensive paper provides a complete technical overview of charitable lead trusts; how charitable deductions are determined for income, gift, estate and generation-skipping transfer tax purposes; the taxation of charitable lead trusts; income tax considerations for grantors and beneficiaries; and private foundation excise tax rules.  MORE »

Privately-held business forms include sole proprietorships, general and limited partnerships, C-corporations, S-corporations, and recently created limited liability companies. In the context of charitable gift planning, the diversity of business forms and the rules that apply to each regarding taxation, ownership, transferability, liquidity, marketability, and income producing capability place them, as a category, at the pinnacle of complexity. This memorandum focuses on outright transfers of privately-held business interests to public charities and private foundations, as well as transfers to charitable remainder trusts and charitable lead trusts.

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Examines the types of gifts that are deductible, how to determine the donor's allowable charitable income tax deduction, percentage limitation and reduction rules, substantiating deductions and compliance penalties.

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A gift of a remainder interest in a personal residence or farm is described generally as a transaction in which an individual irrevocably transfers title to a personal residence or farm to a charitable organization with a retained right to the use of the property for a term that is specified in the gift agreement. At the conclusion of the measuring term, all rights in the property are transferred to the charitable remainderman. This memorandum reviews the income, gift, and estate tax consequences surrounding life estate agreements and the practical issues surrounding their creative use and implementation.

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A charitable remainder trust is a trust that provides for a specified distribution, at least annually, to at least one noncharitable income recipient for a period specified in the trust instrument, with the remainder interest paid to at least one charitable beneficiary. This 285-page, fully annotated text, by Marc D. Hoffman, provides a complete technical overview of CRTs, charitable contribution deductions, transfer tax considerations, operational and investment considerations, and cash Flow planning.  MORE »

It has been said the Internal Revenue Code is referred to as "the Code" because it must be diciphered. In the realm of charitable gift planning, fact patterns and opportunities for which definitive guidance from the IRS and courts do not exist or may seem to conflict. In the absence of clear authority, taxpayers often seek an advance ruling. In this issue Gift Planner's Digest, Jonathan D. Ackerman, J.D., LL.M. provides an entertaining overview of the private letter ruling process.  MORE »

The Service has ruled in technical advice that no gift tax charitable deduction is allowed for transfers to a trust that is subject to four charities' withdrawal powers. Further ruled, each transfer is includable in the computation of adjusted taxable gifts to the trust's noncharitable beneficiaries.  MORE »

The Service has ruled privately that a judicial reformation of a CRUT with a make-up provision to a standard payout format CRUT to cure a scrivener's error is permitted because the trust is not subject to the self-dealing rules as to the income recipients' retained income interests.  MORE »

The Service has ruled that an individual will not recognize gain or loss on her contribution of stock received as a lump-sum distribution from a profit sharing plan to a charitable remainder unitrust.  MORE »