Two new bills that would increase the mileage rate for charitable purposes have been introduced, bringing the total to four now under consideration by Congress.  MORE »

The Service has approved a proposed judicial modification of a testamentary trust based on its finding the trust meets the reformable interest tests under section 2055(e)(3) to qualify as a charitable remainder trust under section 664 and for the Federal estate tax charitable deduction under section 2055(a).  MORE »

The Service has ruled privately that a power of a Special Trustee of a charitable remainder unitrust to allocate payments among the beneficiaries and a power retained by the trustor (or her spouse if she predeceases her spouse) to appoint the Special Trustee or appoint assets among one or more charitable organizations does not prevent the trust from qualifying as a CRT. Further ruled, the transfer qualifies for the gift and estate tax marital deductions.  MORE »

The Service has ruled privately that reasonable fees charged by a community trust for providing grant-making services to separate tax-exempt organizations will not constitute unrelated business taxable income under section 512 of the Code. Also ruled, reasonable fees charged for providing administrative clerical, legal, and computer services, to separate tax-exempt organizations will constitute UBTI, and therefore will be subject to unrelated business income tax under section 511.  MORE »

The Service has ruled privately that reasonable fees charged by a community foundation for providing grant-making services to separate tax-exempt organizations will not constitute unrelated business taxable income under section 512 of the Code. Also ruled, reasonable fees charged for providing administrative clerical, legal, and computer services, to separate tax-exempt organizations will constitute UBTI, and therefore will be subject to unrelated business income tax under section 511.  MORE »

In two companion rulings, the Service has ruled privately that a merger of two public charities described in section 501(c)(3) will not result in the revocation of or otherwise adversely affect either organization's continued tax-exempt status as a public charity, will not generate unrelated business taxable income to either organization, and will not adversely affect the support test of either organization.  MORE »

The IRS has issued Rev. Proc. 2008-46 which contains annotated a sample declaration of trust and alternate provisions for a testamentary charitable lead unitrust with payments to one or more charitable beneficiaries for the unitrust period followed by the distribution of trust assets to one or more noncharitable remaindermen.  MORE »

The IRS has issued Rev. Proc. 2008-45 which contains annotated sample declarations of trust and alternate provisions for grantor and nongrantor inter vivos charitable lead unitrusts with payments to one or more charitable beneficiaries for the unitrust period followed by the distribution of trust assets to one or more noncharitable remaindermen.  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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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 2008-43 indicates the applicable federal rate under section 7520 for August 2008 is 4.2%; unchanged from the July rate of 4.2% and up 0.4% from the June rate of 3.8%.  MORE »

The Service has issued a long-awaited revenue ruling in which it addresses two situations in which a charitable remainder trust is divided pro rata into two or more separate trusts. Such divisions are common when the income recipients desire to separate their interests and when joint income recipients divorce.  MORE »

Writing on behalf of the American Council on Gift Annuities, Lindsay Lapole and Frank Minton have announced the State of New York has issued new reserve requirements for charities that issue charitable gift annuities in New York.  MORE »

The Treasury Inspector General for Tax Administration has issued a report on its Political Activities Compliance Initiative that seeks to educate tax-exempt organizations regarding political campaign intervention, improve internal processes, and detect tax-exempt organizations that are potentially involved in repeated campaign intervention. Although progress has been made, the report concludes that timeliness goals can be improved.  MORE »

The Service has ruled privately that investment units created by a university from its endowment fund for the purpose of investing in charitable remainder unitrusts for which the university serves as trustee are capital assets under section 1221. Accordingly, gain or loss upon the redemption of a unit will be short or long-term capital gain or loss to the unitrust depending on the holding period of the unit by the unitrust.  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 »

One of the greatest planning challenges for many philanthropists is to balance their goals of providing for charity in the immediate term and family members long-term. In this case study, The Sharpe Group illustrates how a couple concerned about an uncertain gift and estate tax environment uses an inter vivos nongrantor nonrersionary charitable lead annuity trust as a "temporary" private foundation.  MORE »