The Service has issued a Revenue Ruling that clarifies its position that a trust is not allowed either a charitable deduction or a distribution deduction in connection with a contribution to charity of trust principal that meets the requirements of a qualified conservation contribution. This revenue ruling amplifies Rev. Rul. 68-667, 1968- 2 C.B. 289.  MORE »

Nearly two years after issuing proposed regulations, the Treasury Department and the IRS have issued final regulations to amend the definition of income under section 643 and to clarify under which circumstances capital gains are included in the distributable net income of a trust or estate. The regulations affect the determination of income distributions from net income charitable remainder unitrusts and pooled income funds.  MORE »

Section 4958 imposes excise taxes on transactions that provide excess economic benefits to disqualified persons of public charities and social welfare organizations. In this article, the IRS discusses when economic benefits received by a disqualified person, which are compensation for income tax purposes and wages for employment tax purposes, should be treated as "automatic" excess benefit transactions under IRC 4958.  MORE »

The Service has ruled privately that engagement by a private foundation of a bank, which is a disqualified person with respect to the foundation, to perform professional services that are reasonable and necessary for compensation that is not excessive is an exception from self-dealing under section 4941(d)(2)(E).  MORE »

The Service has ruled that a private foundation's transfer of all its assets to a supporting organization for the benefit of a community foundation will not cause the private foundation?s status to be terminated, that such transfer will be a qualifying distribution, and that a new community foundation may be substituted for the currently supported community foundation at some point in the future.  MORE »

For purposes of determining the present value of an annuity, an interest for life or a term of years, or a remainder or a reversionary interest, Revenue Ruling 2004-2 indicates the charitable federal midterm rate under section 7520 for January 2004 is 4.2%, unchanged from the December rate of 4.2%, and up 0.2 from the November rate of 4.0%. In addition, the deemed rate of return for transfers during 2004 to pooled income funds that have been in existence for less than three taxable years is 4.8%.  MORE »

The Service has ruled that the proposed partition of a private foundation's and several family trusts' undivided interests in timberlands won't be an act of self-dealing under section 4941.  MORE »

Finance Committee member Rick Santorum, R-Pa., introduced S. 1918, which would codify current practice by allowing down payment assistance to American families for low or moderately priced homes to constitute a charitable activity.  MORE »

On November 19, 2003, the IRS issued proposed regulations regarding the application of recently modified tax rates applicable to various classes of income to the taxation of distributions from charitable remainder trusts. In this article, Ted Batson, CPA of Renaissance, Inc. reviews the new rules, provides examples of their application to the four-tier accounting regime, uncovers conflicts with existing tax form instructions, and highlights issues left unaddressed.  MORE »

At this time of the year, it seems you can seldom turn of the radio without hearing a solicitation for charitable donations of automobiles. While these programs provide a valuable source of revenue for many worthy organizations, concern has arisen regarding the use of independent third party contractors used by charities to dispose of vehicles, the "net amount" received by the charitable recipient, and the amount of deductions claimed by donors. In response, the General Accounting Office has now released a report that compares the proceeds charities received from vehicle donations in tax year 2000 to the amounts taxpayers claimed on their tax returns.  MORE »