June 7520 Rate Unchanged at 1.2%

Marc Hoffman — Wed, 22 May 2013 17:13:35 +0000

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 2013-12 indicates the applicable federal rate under section 7520 for June 2013 is 1.2%; unchanged from the May rate of 1.2% and down 0.2% from the April rate of 1.4%. Read more »

IRS Issues Final Report on Colleges and Universities Compliance Project

Marc Hoffman — Thu, 16 May 2013 17:16:30 +0000

The Internal Revenue Service launched its Colleges and Universities Compliance Project (CUCP) in 2008 when it distributed detailed questionnaires to 400 colleges and universities, requiring comprehensive reporting by those institutions on financial results of business activities such as alumni travel programs and facilities rentals not directly related to higher education. In this article, attorney David Wheeler Newman reviews the findings of the IRS' final report. Read more »

Charitable Giving Coalition Urges Congress to Leave Charitable Deduction Intact

Marc Hoffman — Thu, 16 May 2013 05:57:31 +0000

The Charitable Giving Coalition has sent a letter to House Ways and Means Committee Chair Dave Camp, R-MI., and ranking minority member Sander M. Levin, D-MI., in which it urges Congress to protect the charitable tax deduction as it currently stands. Read more »

AICPA Recommends Changes to Proposed Net Investment Income

Marc Hoffman — Wed, 15 May 2013 22:32:51 +0000

Writing in response to a request for comments on proposed regulations dealing with the Net Investment Income Tax, Jeffrey A. Porter from AICPA recommends that Treasury 1) exclude pooled income funds from taxes on net investment income; and 2) provide that NII of charitable remainder trusts are treated in accordance with section 664(b) and section 1.664-1(d)(1)(ii)(b) and not treated as distributed first to the annuity or unitrust recipient unless so required under the current statutory and regulatory provisions. Read more »

Service Approves Scholarship Grants from Private Foundation

Marc Hoffman — Wed, 15 May 2013 21:25:22 +0000

The IRS has ruled privately that a private foundation's scholarship grants to individuals who have been diagnosed (or members of their immediate family) with a specific medical condition and who meet other specific criteria are not prohibited taxable expenditures from the foundation, nor are they taxable income to the recipients provided they use them for tuition and education-related expenses. The Service ruled favorably because the procedures for awarding the grants meet the requirements of IRC section 4945(g). Read more »

Location, Location, Location!

Marc Hoffman — Wed, 15 May 2013 20:16:12 +0000

Responding to a request for Chief Counsel Advice, the IRS has advised the location of a substantial portion of donated real property within the boundaries of a national park results in a restriction on the property's highest and best use as a mineral property, and that such a restriction is a factor affecting the fair market value of the property for charitable deduction purposes. Read more »

Rebirth of the Charitable Remainder Trust

Marc Hoffman — Thu, 09 May 2013 18:02:57 +0000

Charitable remainder trusts are back! This according to attorney and PGDC contributing author David Wheeler Newman of Mitchell, Silverberg & Knupp, LLP. Read on to see why CRTs are enjoying renewed popularity. Read more »

Tax Court Holds Charitable Remainder Trust and Other Trusts to be Shams

Marc Hoffman — Tue, 07 May 2013 21:37:40 +0000

The Tax Court has held that a series of trusts, which included a charitable remainder annuity trust, formed by a physician and his wife according to the instructions of a tax shelter promotor as part of complex construction to disguise or eliminate taxable earnings from the physician's business activities were created primarily for tax-avoidance purposes and, therefore, shams. The trusts are disregarded for federal tax purposes with the petitioners liable for taxes on underreported income, self-employment taxes and accuracy related penalties. Read more »

Corporate Donor Not Subject to Reduced Deduction on Donation of Section 1250 Property

Marc Hoffman — Tue, 07 May 2013 18:06:54 +0000

The IRS has ruled privately that if certain section 1250 property (depreciable real property) is contributed to one or more tax-exempt organizations by a corporate donor, the charitable deduction attributable to the value of that contribution will not be reduced by twenty percent of the accumulated depreciation of the section 1250 property under section 291(a)(1) of the Internal Revenue Code. Whereas section 291(a)(1) would be implicated in other types of dispositions, the Service clarified that a disposition by gift does not apply. Read more »

Bill Would Remove Charitable Deduction from Limitation on Itemized Deductions

Marc Hoffman — Wed, 01 May 2013 05:16:40 +0000

Rep. F. James Sensenbrenner Jr., R-WI, has introduced H.R. 1479, that would amend the Internal Revenue Code of 1986 to remove the deduction for charitable contributions from the overall limitation on itemized deductions. Read more »