July 2020 | Sharpe Group
Sharpe Blog

Archive for July, 2020

IRS Nips in the Bud a Gift Plan Too Good to Be True

In General Counsel Memorandum AM 2020-006, the IRS responded to a promoter’s request to affirm its legal conclusions that a taxpayer could escape forever capital gains taxation on appreciated property funding a charitable remainder annuity trust (CRAT). The property was to be closely held business interests, farmland and crops. The trust’s terms for the payment …Read More

Giving During Hard Times

A recent opinion column in USA Today by Una Osili and Patrick M. Rooney expressed the hope that charitable giving will remain strong despite the current difficult times. Their opinions are based on more than just hope; their careers have focused on serious philanthropic research at Indiana University Lily Family School of Philanthropy at IUPUI …Read More

The 5% Probability Test … And How to Avoid It

In the late 1970s, the IRS announced it would apply a new test to charitable remainder annuity trusts (CRATs)—the 5% probability test (5% Test). If there was more than a 5% probability that a CRAT would be exhausted during the payout recipient’s life, no federal income tax charitable deduction would be allowed with respect to …Read More

Two Important Questions

In recent days, I’ve been asked two timely questions: Is it OK for a college to contribute funds to organizations leading protests for racial justice? Is it OK for a school to establish a scholarship fund just for members of a certain racial group? These are questions of law, not policy. The first question is …Read More

“I Am Ready for My Closeup, Mr. DeMille”: Planned Giving’s “Moment”

As the country rides out the pandemic while contemplating the meaning of both social unrest and volatile financial markets, many of the nation’s most impactful charities are bracing for reduced philanthropic support. EAB, a higher education and technology consulting firm, surveyed 110 development executives about their predictions for COVID-19’s impact on fundraising. The survey also …Read More

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