The Service has ruled privately that the receipt by a private foundation of notes receivable, where the obligor is a disqualified person and where the private foundation will become the creditor, from and during the course of administration of a revocable trust which is an unrelated third party will not constitute an indirect act of self-dealing under section 4941(d)(1) because all the exceptions of section 53.4941(d)-1(b)(3) of the regulations have been satisfied.  MORE »

The Joint Committee on Taxation has released a brief description of the present law governing section 501(c)(3) organizations, a summary description of the section 501(c)(3) organization-related provisions of the Pension Protection Act of 2006 and related proposed legislative proposals for a House Ways and Means Oversight Subcommittee hearing conducted on July 24.  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 2007-50 indicates the charitable federal midterm rate under section 7520 for August 2007 is 6.2%; up 0.2% from the July rate of 6.0% and up 0.6% from the June rate of 5.6%.  MORE »

An amendment to stop the patenting of tax planning methods was adopted by the House Judiciary Committee on July 18, 2007 by voice vote during the mark-up of H.R. 1908, Patent Reform Act of 2007. Although not stated specifically, because the bill defines a "tax planning method" as "a plan, strategy, technique, or scheme that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing or deferring, a taxpayer's tax liability," we presume charitable giving arrangements would be included. The bill was then reported out of committee and headed to the House floor. The Senate is marking up a similar bill.  MORE »

In this article from Leimberg Information Services, New York attorney Conrad Teitell is ringing an alarm bell about a major charitable deduction benefit that may be lost thanks to a few greedy tax promoters, donors, and complicit charities who are conspiring to grossly inflate the value of charitable gifts, conceal key elements from the IRS, and avoid the Form 8282 "tattletale" rule.  MORE »

In a letter to Mr. William P. O'Shea, Associate Chief Counsel for Passthroughs and Special Industries, the AICPA is seeking guidance with respect to how administration expenses, such as trustee's fees and tax return preparation fees, which are not otherwise attributable to any specific income produced by a charitable remainder trust, are allocated among the four general categories of ordinary income, capital gain, other income, and corpus.  MORE »

In determining if the sale of property held by a foundation produces unrelated business income, a determining factor is whether the property was held primarily for sale to customers in the ordinary course of a trade or business. Even though a foundation participated in the development of condomiums, the Service has ruled that a subsequent sale by the foundation of its interest will not produce UBI or adversely affect the foundation's 501(c)(3) exempt status.  MORE »

According to Barlow T. Mann and Robert F. Sharpe, Jr. from The Sharpe Group, the popularity of charitable remainder trusts and pooled income funds has flagged over the past several years while charitable gift annuities and charitable lead trusts have enjoyed unprecedented growth. In this article from the June 2007 issue of Trusts & Estates, the authors share why they believe a confluence of factors are leading to a resurgence of charitable remainder trusts and the continued popularity of charitable lead trusts.  MORE »

House Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) announced yesterday that the Subcommittee will hold an overview hearing on tax-exempt organizations, which will focus on charities and foundations described in Internal Revenue Code section 501(c)(3). The hearing will take place on Tuesday, July 24, 2007, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.  MORE »

The Service has ruled in technical advice that loans from a corporation that is a disqualified person with respect to a private foundation to another business entity, a portion of which is also owned by the private foundation, is not an indirect act of self-dealing under section 4941.  MORE »

The Service has issued an advance copy of Rev. Proc. 2007-52 which sets forth the procedures for issuing determination letters and rulings on exempt status of organizations under sections 501 and 521. These procedures also apply to revocation and modification of determination letters or rulings, and provide guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under section 7428.  MORE »

Maintaining its consistency with prior rulings, the Service has ruled that early terminations of two charitable remainder unitrusts and division of trust assets between income recipients and charitable remaindmen will not result in the imposition of a termination tax under section 507(c) or be considered acts of self-dealing under section 4941.  MORE »

The U.S. Patent and Trademark Office has published a patent application in which the inventors claim a unique use of combinations of charitable remainder trusts, charitable lead trusts, gifts of remainder interests in real property, options, and life insurance to accomplish business tax planning objectives.  MORE »