Anticipating and Avoiding Problems | Sharpe Group
Posted May 21st, 2018

Anticipating and Avoiding Problems

The world of charitable gift planning is a world of well-meaning donors who do a world of good across an incredible spectrum of needs, wants and aspirations.

It’s too bad, but it must not be ignored by gift planners, that the most well-meaning donor can be tripped up by the tax law, be given faulty legal advice, have his or her gift intentions frustrated or otherwise fail to achieve his or her goals in making a donation.

Here, in the writer’s experience, are some of the most common gift planning problems to be anticipated and avoided:

  1. Flawed gift receipts: A huge problem across the board found lurking in charities both large and small. The IRS is aware of this problem area … it represents low-hanging fruit for the IRS.
  2. Flawed appraisals: Another huge problem area for donors who need to obtain a “qualified appraisal.” The probability the appraisal the donor obtains will be a “qualified appraisal” is about zero.
  3. IRA gifts: A cluster of problems here, ranging from tax law uncertainty as to the date of gift for certain IRA distributions to obstacles thrown up to charitable IRA beneficiaries by IRA custodians. Click here to read another IRA gift reporting mistake to help your donors avoid.
  4. Mishandling of trusts and estates: It is truly amazing how donors’ charitable gift intentions get thwarted by fiduciaries (executors, trustees, lawyers, etc.) who mis- or under-perform.
  5. Bad tax advice: You have to see it to believe it.

Keep in mind this prescription: It’s vastly better to anticipate and avoid a problem than to try to solve a problem once it’s arisen.

Also keep this in mind: The best donors often have less than the best advisors.

Click here to read this Give & Take article on tax traps.

We also have an informative white paper you can download, “Gift Substantiation in a Nutshell.” Click here to access it.

by Jon Tidd, Esq

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