Nonprofit Law Matters

Category Archives: Charitable Gift Planning

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Tax Reform Affects Exempt Organizations

Posted in Charitable Gift Planning, Private Foundations, Public Charities, Religious Institutions, Revenue Generating Activities, Tax Treatment of Lobbying & Political Activities

The House Ways and Means Committee on Thursday introduced its highly anticipated tax legislation, called the Tax Cuts and Jobs Act.  The Act proposes major changes to the Internal Revenue Code, including lowering the number of tax brackets, increasing the standard income tax deduction, and repealing or limiting other deductions.  You may have read about… Continue Reading

RERI Holdings I, LLC and the Importance of Form 8283

Posted in Charitable Gift Planning, IRS, IRS, FTB & Attorney General Controversies

A recent Tax Court case, RERI Holdings I, LLC et al. v. Commissioner, 149 T.C. 1 (Jul. 3, 2017), should remind charities and their donors of the importance of full compliance with the substantiation rules and the potential costs of aggressive tax planning. Facts of RERI Holdings To over-simplify the complex facts in RERI Holdings:… Continue Reading

Good News for CRATs!

Posted in Charitable Gift Planning, IRS

A charitable remainder annuity trust (“CRAT”) is a trust that pays a fixed amount to a beneficiary (typically the donor) for his/her life or a term of years, and then pays the remainder to one or more charities.  The fixed amount is generally defined as a percentage of the initial value of the asset(s) contributed… Continue Reading

PATH Act Provides Certainty Regarding Gifts to 501(c)(4), 501(c)(5) and 501(c)(6) Tax-Exempt Organizations and Makes Permanent Certain Tax “Extenders”

Posted in Charitable Gift Planning, Unions, Associations, Clubs & Other Tax-Exempt Organizations

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”).  The PATH Act contains several provisions of note for tax-exempt organizations.  This post focuses on two:  (1) gift tax consequences of contributions to 501(c)(4), (c)(5), and (c)(6) organizations, and (2) permanent enactment of certain… Continue Reading

New York College Cannot Change Its Name in Return for a Proposed Donation

Posted in Charitable Gift Planning, IRS, FTB & Attorney General Controversies, Public Charities

Paul Smith’s College, “the College of the Adirondacks,” was established in 1937 and remains the only baccalaureate-degree-granting institution in Adirondack Park, New York.  Paul’s son, Phelps Smith, bequeathed the bulk of his estate to create a college in his father’s name, and his bequest required that the college “be forever known” as Paul Smith’s College of… Continue Reading

Good News on the Investment Front!! California Passes AB 792, Harmonizing Investment Standards for Nonprofits in California

Posted in Charitable Gift Planning, Private Foundations, Public Charities, Religious Institutions

The stock market may be in shambles, but California charities have reason to celebrate.  Historically, charities formed as California nonprofit public benefit corporations have had to satisfy two state law investment standards:  Corp. Code Section 5240 and UPMIFA (found at Probate Code section 18501 and following).  Corp. Code Section 5240(b) provides that in making investments, a… Continue Reading

California Tax Lawyer Publishes “Proposed Guidance for Donor Advised Funds”

Posted in AG, IRS, FTB, & Property Tax Proceedings, Charitable Gift Planning, Nonprofit Structures, Relationships & Transactions, Public Charities

The California Tax Lawyer recently published Proposed Guidance for Donor Advised Funds, a policy paper co-authored by Adler & Colvin associate attorney Jorge Lopez and Courtney Nash of Farella, Braun + Martel.  The authors describe the history of DAFs, and explain the changes made with adoption of new rules as part of the Pension Protection… Continue Reading

FASB Proposes Significant Changes to Nonprofit Accounting Standards

Posted in Charitable Gift Planning, Private Foundations, Public Charities

The Financial Accounting Standards Board (“FASB”) recently issued a Proposed Accounting Standards Update (“ASU”) specific to Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954).  The ASU seeks to improve net asset classification reporting requirements, as well as require expanded information on liquidity, financial performance, and cash flow.  The full scope of proposed changes… Continue Reading

Date of Gift Rules for Charitable Contributions

Posted in Charitable Gift Planning, Private Foundations, Public Charities

The end of the year is nigh, and timing is crucial to determining the year of a donor’s income tax deduction, the value of a donor’s fluctuating asset, and the characterization of the donor’s asset as short-term or long-term.  In general, a gift is complete when the donor relinquishes control over the asset and delivers… Continue Reading

Some Restrictions Apply: Donating Restricted Stock

Posted in Charitable Gift Planning

Congratulations!  Your startup is finally going public/being acquired/experiencing some other “liquidity event,” and those shares you have been earning are actually going to be worth something!  Your taxable income is probably going to spike this year, and you may be thinking about offsetting it with a large donation to your favorite public charity.  Your most… Continue Reading

Be Judicious If Your Name Is Fictitious: Tips for Nonprofits Using DBAs

Posted in Charitable Gift Planning, Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“Names are not always what they seem.  The common Welsh name BZJXXLLWCP is pronounced Jackson.”  — Samuel Clemens (“dba” Mark Twain) Nonprofits use alternate names for many reasons, from making a name shorter to representing a particular project.  A nonprofit considering a name change can either legally change its name by amending its articles of… Continue Reading

An Ethical Issue for Estate Planning Attorneys Who Sit on Charity Boards — Take Heed!

Posted in Charitable Gift Planning

The Maryland State Bar Association’s Committee on Ethics issued an opinion in 2003 regarding an attorney who served on his church’s “Legacy Committee.”  The attorney asked whether he could prepare estate planning documents free of charge for parishioners who wanted to leave a bequest to the church.  The Ethics Committee found that this arrangement would constitute… Continue Reading

CRT Disclosure

Posted in Charitable Gift Planning

We have good news and bad news.   The IRS Form 990 (filed by tax-exempt organizations) includes a number of schedules, including Schedule R: “Related Organizations and Unrelated Partnerships,”  which was rolled out for tax years beginning in 2008.  The 2010 instructions for Schedule R clarified that charities should report charitable remainder trusts (CRTs) that are “related”… Continue Reading

Revised CGA Rates

Posted in Charitable Gift Planning

The American Council on Gift Annuities (ACGA) held its semi-annual meeting on November 7, 2011. The board reviewed the current assumptions that underlie the gift annuity rate schedules and, recognizing the significant changes in the economic environment, approved a new schedule of suggested rates.  These new rates will become effective January 1, 2012.   As you… Continue Reading

Governor Signs Amendment to California Professional Fiduciaries Act

Posted in Charitable Gift Planning

California’s Governor signed AB 997 into law on September 26, 2011.  AB 997 amends the California Professional Fiduciaries Act (the “Act”), which provides for the licensing and regulation of professional fiduciaries via the Department of Consumer Affairs.  Prior law.  The Act defined professional fiduciaries to include a person who serves as trustee for more than… Continue Reading