The Court of Federal Claims has held that a charitable trust established to donate money to Cornell University is not entitled to a refund of unrelated business income tax it paid on the sale of securities. At issue was whether securities purchased on margin for a trust established on behalf of a university are debt-financed property, and whether the income derived from the sale of the securities is subject to UBIT.  MORE »

The IRS has issued guidance that provides reliance criteria for private foundations and sponsoring organizations that maintain donor advised funds in determining whether a potential grantee is an organization described in section 509(a)(1), (2) or (3) of the Internal Revenue Code.  MORE »

It was Will Rogers who once said, "I'm not as interested in return on my principal as I am return of my principal. In this case study, Mr. Braun, an 82-year-old widower who is worried about market volatility, learns how he can transfer appreciated stock from his portfolio to a charity in exchange for a charitable gift annuity that will provide him with a substantial income tax deduction and fixed annual payments that will provide for his future health care and other needs for the balance of his life. In addition, Mr. Braun will make a meaningful contribution to his community.

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Legislation enacted in 2001 calls for the repeal of the federal estate tax in 2010, and its full reintroduction in 2011. That law has since generated considerable interest in how changes in the estate tax and its ultimate repeal may affect charitable bequests and the fortunes of philanthropies. In this article, David Joulfaian, from the Department of the Treasury's Office of Tax Analysis, offers his personal analysis and opinion on this issue.

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The Tax Court has determined the value of a perpetual conservation easement for land on a golf course donated by a limited liability company to be $28,656,004. The IRS had denied any deduction for the value of the easement or a $35,000 cash gift made to the charitable donee and desired to impose accuracy-related penalties. However, the court relied heavily on the opinion of the taxpayer's valuation expert while giving little credence to the opinion of the appraiser put forth by the Service.  MORE »

Despite the recession, people are giving and giving generously. In this article from the June 2009 issue of the Journal of Financial Planning, financial writer and gift planning specialist Jim Grote explores the types of gifts that are being made in today's environment.

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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 2009-20 indicates the applicable federal rate under section 7520 for July 2009 is 3.4%; up 0.6% from the June rate of 2.8% and up a full 1.0% from the May rate of 2.4%.  MORE »

According to a report and recommendations by the Center on Budget and Policy Priorities, Congress should keep the value of itemized deductions at today’s 33 and 35 percent levels. Doing so would maintain the incentives for charitable giving and other deductible costs, and would help finance health care reform by saving $68 billion over ten years.

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H.R. 2435, introduced by Rep. Suzanne M. Kosmas, D-Fla., would amend the Internal Revenue Code of 1986 to extend the tax-free treatment for distributions from individual retirement plans for charitable purposes.  MORE »

To be or not to be? That seems to be the question for a growing number of family foundations, a new report from the Foundation Center and the Council on Foundations, and as reported by the Philanthropy News Digest blog, finds.  MORE »

Charitable giving fell last year by the largest percentage in five decades, according to a new study by the Giving USA Foundation and as reported by The New York Times.  MORE »

The American Institute of Certified Public Accountants released on May 21 a letter applauding Representative Rick Boucher [D-VA] and Representative Bob Goodlatte [R-VA] for introducing legislation that would prohibit patents on tax planning methods.  MORE »

According to a report in The Chronicle on Philanthropy, community foundations increased their giving in 2008, bucking the belt tightening that swept nearly all quarters of the philanthropic world, according to a new report by the Foundation Center.  MORE »

Rep. Rick Boucher, D-Va. has introduced a bill that if enacted would amend title 35 of the United States Code to limit the patentability of tax planning methods.  MORE »

The Partnership for Philanthropic Planning and American Council on Gift Annuities have released statements taking strong issue with a May 12 article from the Wall Street Journal entitled “Donors Find Gift Annuities Can Stop Giving” as a "distorted view of the role gift annuities play in philanthropy and is  potentially damaging to Americans and the charities they support."  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 2009-16 indicates the applicable federal rate under section 7520 for June 2009 is 2.8%; up 0.4% from the May rate of 2.4% and up 0.2% from the April rate of 2.6%.  MORE »

The Service has ruled privately that a grantor charitable lead annuity trust that distributes appreciated securities to a private foundation in satisfaction of the annuity amount will result in gain to the grantor.  MORE »

The Wall Street Journal continues to report on the collapse of the National Heritage Foundation and its effect on its gift annuity donors. The message is donors and their advisers should scrutinize the financial strength of issuing organizations just as they would any other investment.  MORE »

Office of Management and Budget Director Peter R. Orszag in a May 9 OMB blog has reiterated the Obama Administration's plans to cap the rate at which taxpayers earning over $250,000 can use itemized deductions to reduce their income tax liability at 28 percent.  MORE »

The Treasury on May 11 released the General Explanations of the Administration's Fiscal Year 2010 Revenue Proposals (Greenbook) to "provide details of plans to cut taxes for small businesses and middle class families and close unfair corporate tax loopholes." Of interest to charitable gift and estate planners are the administration's plans to target "valuation games played by those facing estate and gift taxes that allow them to undervalue transferred property."  MORE »

Development offices and non-profit organizations of all sizes and shapes are taking a closer look at real estate gifts and the transforming impact these gifts can have on their organization. The largely untapped potential of charitable real estate gifts is becoming even more critical in these challenging economic times. In this article (published originally on the University of Denver's PGDC) Dennis Bidwell gives insight on why organizations should take a closer look at real estate gifts and how they can position themselves for success in attracting them.  MORE »

The IRS has issued final and temporary regulations relating to the use of actuarial tables in valuing annuities, interests for life or terms of years, and remainder or reversionary interests, and establishes transitional rules for their use. These regulations will affect the valuation of inter vivos and testamentary transfers of interests dependent on one or more measuring lives and are necessary because section 7520(c)(3) directs the Secretary to update the actuarial tables to reflect the most recent mortality experience available. The text of the temporary regulations also serves as the text of the proposed regulations set forth in T.D. 9448.
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The IRS has issued proposed regulations revising the actuarial tables used in valuing annuities, interests for life or terms of years, and remainder or reversionary interests. Simultaneously released temporary regs (T.D. 9448) also provide the text of the proposed regs. Comments are requested by August 5, 2009.  MORE »

The IRS has released Publications 1457, 1458 and 1459 in which it illustrates the method for using actuarial factors for certain income tax valuations of future interests. Of note is a new mortality Table 2000CM which is effective for gifts made after April 30, 2009.  MORE »

The IRS has announced its annual "Dirty Dozen" list of tax scams for 2009. And yes, abuse of charities and charitable deductions again made the list.  MORE »