In this opinion article, attorney Bruce Givner reviews the legislative history of a portion of the Pension Protection Act of 2006 which requires Treasury to promulgate new regulations on payments required by Nonfunctionally Integrated Type III Supporting Organizations, why he believes a 5% minimum distribution requirement is an incorrect reading of congressional intent, and how he believes charities should respond.  MORE »

Treasury has issued extensive proposed regulations regarding the requirements to qualify as a Type III supporting organization that is operated in connection with one or more supported organizations. The regulations reflect changes to the law made by the Pension Protection Act of 2006. The regulations will affect Type III supporting organizations and their supported organizations.
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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 »

Writing on behalf of Deloitte Tax LLP, Laura Peebles has suggested that proposed regulations that would require attaching a complete appraisal with Form 8283 in any year in which an income tax charitable contribution deduction is carried over be removed and that including a copy of prior years' Forms 8283 would be sufficient.  MORE »

Writing on behalf of the American Council on Gift Annuities (ACGA) and the National Committee on Planned Giving (NCPG), New York attorney Conrad Teitell expresses opposition to the proposed Charitable Lead Trust regulation that requires the payments to the charitable beneficiary to consist of different classes of income determined on a pro rata basis.  MORE »

On June 7, 2007, Treasury issued proposed regulations that address the portion of a trust that is includable in a deceased grantor's gross estate under sections 2036 and 2039 in the event the grantor has retained the use of trust property or the right to an annuity or other income payment from the trust for life. Following the comment period and public hearing, Treasury has issued final regulations that are effective July 14, 2008. In addition to amounts includable with respect to GRATs, GRUTs, GRITs and CRTs measured by life, the final regulations address pooled income funds, remainder interests in personal residences and farms, and CRTs measured by a term of years.
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Treasury has issued proposed regulations that will amend the regulations under section 642(c) to confirm that a provision in a governing instrument of a charitable lead trust or in local law that specifically provides as to the source out of which amounts are to be paid, permanently set aside or used for a purpose specified in section 642(c) must have economic effect independent of income tax consequences in order to be respected for Federal tax purposes. Accordingly, payments to a charity will consist of the same proportion of each class of the items of income of the trust as the total of each class bears to the total of all classes. See § 1.642(c)-3(b)(2).  MORE »

Although the IRS last week canceled a public hearing in Washington, D.C. on proposed regulations for the new unrelated business income tax rules applicable to charitable remainder trusts, two firms from the State of Washington have asked for transitional relief in the form being able to elect the lesser of the taxes under the old and new law in order to allow CRTs time to restructure their investments.

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Treasury has issued proposed regulations that provide guidance under IRC § 664 on the tax effect of unrelated business taxable income on charitable remainder trusts for tax years beginning in 2007. The proposed regulations clarify that, consistent with § 1.664-1(d)(2), the excise tax imposed upon a charitable remainder trust with UBTI is treated as paid from corpus and the trust income that is UBTI is income of the trust for purposes of determining the character of the distribution made to the beneficiary. Notice of a public hearing on these proposed regulations is also provided.

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