Life settlement, in which life insurance policies are sold in a secondary market, has become a major financial market and viable opportunity for policyowners to convert unneeded policies for more than their cash surrender value (CSV), often with favorable tax treatment. In this article from the Journal of Accountancy, appraiser Alan Breus, CLU, ChFC reviews the history of the life settlement marketplace, emerging regulation, income tax consequences, tips for safe transactions, and charitable applications.

  MORE »

When considering their charitable options, many donors overlook giving assets that can provide the greatest tax benefits. In this article from the Journal of Practical Estate Planning, Orange County, California attorney Joy Gibney Berus discusses several factors to consider and requirements that must be met to obtain and maximize the benefits from donations of art, antiques and collectibles.  MORE »

On October 3, 2008, Congress passed and President Bush signed into law the Emergency Economic Stabilization Act of 2008. Of all the last minute sweeteners added to the Senate version of the bill, one of the sweetest for charitable organizations and those who support them was an extension of the charitable IRA rollover provisions that expired at the end of 2007. In this article, The Sharpe Group reviews these provisions and offers resources that can help organizations and advisers assist their donors and clients to take advantage of this renewed giving opportunity.  MORE »

According to a new article by Barlow Mann of The Sharpe Group, organizations asking their older donors to simply include them in their will may be missing a tremendous opportunity: current gifts of publicly-traded securities and other non-cash assets.  MORE »

In February of this year, Congress passed the Economic Stimulus Act of 2008. Included in this bill is a provision for up to 130 million taxpayers to receive tax rebates. In this special report, Robert Sharpe, Jr. and Barlow Mann from The Sharpe Group discuss what they believe to be a tremendous opportunity and advantage for taxpayers to donate their rebates to charity.
  MORE »

According to a study by New York University - Stern School of Business finance professor David L. Yermack, corporate CEOs may be taking advantage of inside information to maximize charitable deductions for company stock transferred to their own private foundations. In "Deduction Ad Absurdum: CEOs Donating Their Own Stock to Their Own Family Foundations", Dr. Yermack studies 151 charitable gifts of at least $1 million noting that such gifts, which are not subject to strict insider trading rules, are often followed by sharp declines in the price of the donated stock. He even suggests CEOs may be backdating their gifts in a way similar to recent stock option backdating practices in collusion with the charitable donee and others in order to increase their personal deductions.  MORE »

A few years ago, insurance advisers Michael Brink and Bryan Clontz wrote an article for the Planned Giving Design Center that discusses ten creative charitable uses of life insurance and their tax implications in planned giving. It has now been updated for current law, so we thought you might enjoy taking another look.
  MORE »

Despite the old adage warning against discussing politics in polite company, we just couldn't resist the partisan throw-down that happened between Sen. Harry Reid and radio talk show host Rush Limbaugh during the past few weeks that resulted in a $4,200,200 gift to charity via an eBay auction. We were curious how the gift was structured and thought you might be as well.  MORE »

Have you ever attended a charity auction only to have the well-meaning auctioneer rally the audience by saying, "Come on everybody, it's deductible!" In this updated article, Ronnie C. McClure, Ph.D., CPA, suggests donors, bidders, and charitable organizations may be in for a surprise. Although auctions probably fall more under the category of "spontaneous" than "planned" giving, there are several interesting tax facts you might want know before the next gavel falls.  MORE »

Can an IRA be used to help indirectly finance life insurance owned by a charity? In this article, Steve Leimberg reviews and comments on recently published Ltr. Rul. 200741016 in which the Service concluded the arrangement is not a prohibited investment in insurance within the meaning of section 408(a)(3) of the Code such that the IRA would cease to be an IRA under section 408(a)(3).  MORE »

The Michigan Appeals Court has affirmed the decision of a lower court in Smallegan v. Kooistra in which it held that a donor's attorney did not commit malpractice because he did not ensure the donor had acquired wealth replacement life insurance prior to the funding of a charitable remainder trust.  MORE »

When the late New York billionaire hotelier Leona Helmsley's will was made public in Westchester Surrogates Court last week, most of the attention of the press fell on the $12 million Helmsley left in trust for the benefit of her canine companion, Trouble. For charitable gift planners, however, the philanthropic components of her will also made for some interesting reading.  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 »

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 »

In this article from The Journal of Gift Planning, Los Angeles attorney Reynolds Cafferata explores both the harm and benefit that may arise from enforceable pledge agreements, and reviews the many issues that should be considered in drafting an enforceable agreement that serves both the donor and the charity. He proposes alternatives to enforceable pledges, including the statement of intent to make a gift and the revocable enforceable pledge.  MORE »

In this article from Leimberg Information Services, distinguished estate planner and author Byrle M. Abbin points out the recent change in Code Section 664(c) from an income taxable status to an excise tax on UBTI can have an economic result ranging from "disastrous" to "no consequence." What makes the difference, Byrle tells us, is controlled by the nature of the investment and portion that is UBI. Byrle monetizes the impact of the new tax under a range of scenarios, and provides a definition of the excise tax base. If you work with CRTs, this is a MUST read analysis!  MORE »

The tax law surrounding charitable contributions of tangible personal property such as artwork to museums has long been subject to vigorous debate among taxwriters. In this article, Connecticut attorney James B. Lyon reviews the evolution of these rules with emphasis on the newest and most restrictive provisions as imposed by the Pension Protection Act of 2006.  MORE »

The Tax Relief and Health Care Act of 2006, signed into law on December 20, 2006, includes a provision that will be welcome news to most trustees of charitable remainder trusts. Beginning in 2007, charitable remainder trusts that have unrelated business taxable income will no longer lose their tax-exempt status for the year; rather, an excise tax will be imposed in the amount of unrelated business taxable income itself. While this will be welcome news to most trustees, the new law also creates a trap that is potentially more confiscatory.  MORE »

Following passage of the PPA 2006 and the first "Charitable IRA Rollover," the two most significant questions on advisors' minds have been how taxpayers will exclude qualified charitable distributions on their income tax returns and whether or not IRA custodians will be responsible for determining if a distribution is indeed qualified. In this article, UMKC law professor Christopher R. Hoyt shares the answers.  MORE »

In a legal memorandum published earlier this week, the IRS concluded that a partial transfer of a decedent's IRA to charities in satisfaction of a pecuniary bequest via the decedent's trust results in gross income to the estate and fails to qualify for an offsetting charitable deduction. Writing for Leimberg Information Services, UMKC law professor Christopher R. Hoyt takes issue with the IRS's position arguing it could result in double income taxation.  MORE »

Although we have published individual articles regarding selected charitable provisions of the Pension Protection Act of 2006, when distinguished Philadelphia attorney Richard L. Fox, who also chairs the Chartered Advisor in Philanthropy program at The American College, offered to share his comprehensive overview of the charitable provisions of the Act with PGDC members, we simply said, "fantastic!"  MORE »

Among its many provisions, the Pension Protection Act of 2006 has for the first time defined donor advised funds and has placed new rules on their use. In this article, Laura Hansen Dean, J.D., from the Community Foundation of Southern Indiana, reviews the new rules and offers help to organizations that desire to communicate them to fund advisors.  MORE »

The Pension Protection Act of 2006 significantly increases the deduction for donations of conservation easements for 2006 and 2007 and tightens the availability of deductions for facade easements. In this article from Leimberg Information Services, Boston attorney Joan B. Di Cola reviews these new rules along with new rules that apply to qualified appraisals, who can perform them, and new accuracy related penalties.  MORE »

On Thursday, August 17th, President Bush is scheduled to sign the Pension Protection Act of 2006 that includes a long-awaited provision that will permit taxpayers to make direct charitable transfers from their Individual Retirement Accounts. In this article, PGDC Editor Marc D. Hoffman reviews the new rules and how donors, charities, and IRA administrators might respond.  MORE »

The September 11, 2001 terrorist attacks on the United States resulted in new laws under which U.S. grant making nonprofits risk criminal prosecution, civil penalties and the freezing of their assets if they are found to have made grants to foreign or domestic individuals or organizations that engage in or support terrorism. In this article, Los Angeles attorney and PGDC Editorial Board member Jane Peebles describes these measures and provides resources for complying with the law.  MORE »