Facts Some time ago, H and W established a CRAT of which they are the trustees. The remainder beneficiary of the CRAT is H and W’s private foundation. The assets of the CRAT have grown to the point where they’re way more than needed to support the annuity payments to H and W. What H… read more

Donor wants to establish a gift annuity with appreciated stock but doesn’t know her cost basis in the stock. – The rule here is simple. If a taxpayer doesn’t know the basis of an asset he or she owns, the basis is zero for federal tax purposes. Donor wants to contribute a life insurance policy… read more

1.  Must the books kept by the development office and by the business office be identical? No, and they shouldn’t be. Business office accounting is governed by FASB. FASB has nothing to do with development office counting, crediting, and recognition. 2.  Is it OK to provide in a naming-gift pledge agreement that the pledge is… read more

For example, a charitable remainder unitrust set up to run for the life of an individual aged 50. Some charities have gift acceptance policies that are questionable when it comes to minimum ages for certain “life income” gift plans. Age 50 is way too young for a CRUT other than a term-of-years CRUT. Age 60,… read more

 A Qualified Appraiser is an individual who is qualified to prepare a qualified appraisal of a given asset that is donated. The starting point in thinking about all this is the asset. The appraiser needs to meet certain education and experience requirements with respect to the particular type of asset. Lots of time, there’s no… read more

Dora, aged 80, wants to provide her disabled niece, Fredda, with a fixed life income, maybe an income that will increase by a certain amount if Fredda lives to a certain age. Fredda is aged 50 and has a shortened projected lifespan because of her disability. Nonetheless, Fredda’s doctor says Fredda could live to age… read more

Last time we looked at the IRS’s new regs on qualified appraisals. This time we look at an exception to the qualified appraisal rules that existed under the old regs that is erased from the new regs. It’s the reasonable cause exception. The reasonable cause exception allowed a flawed appraisal, even a badly flawed appraisal,… read more

There appears to be a significant change coming in how appraisals must be done for certain charitable gifts. Here’s an example: Donor 1 sets up a charitable remainder unitrust that is to make payments to Donor 1 for life. Donor 1 funds the unitrust with undeveloped land. Donor 2 does the same thing, only she… read more

Inflation adjustments for 2019, released recently by the IRS, are slightly lower than they might otherwise have been, due to a new calculation method.  Increases are now determined using the chained consumer price index (C-CPI), which recognizes that when certain prices rise, consumers find cheaper alternatives.  Among this year’s adjustments: Income tax brackets Capital gains… read more

Last time, we left off with a homework problem. Now a homework problem, the solution to which will be given next time. Here’s the problem: Your VP for development asks you to determine the present value of a $1 million bequest to be received under the will of a living individual aged 79. Question: What… read more