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Posted February 20th, 2019

Charitable Gift Planning Q&A

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 not legally enforceable?

Generally speaking, yes. But be sure to check applicable state law. Naming-gift pledges are ordinarily enforceable as contracts. Negating the contract may be desirable, for example, if the donor might want to use her private foundation to pay part of the pledge.

3.  Are DAFs subject to the same tax rules as private foundations?

No, but there are some similarities. For example, the self dealing prohibition applies to private foundations but not to DAFs. Nonetheless, a DAF can get into trouble with the IRS if it uses its assets for the benefit of its creator, such as tickets to a banquet or special event.

4.  Can a CRT be set up to run for the life of a pet?

Strictly speaking, no. But there’s a way to do it. The CRT is set up to run for a term of years (or a human life); and the trust agreement contains a qualified contingency…causing the trust to terminate earlier than normal upon the death of the pet.

5.  Can an individual who creates a CRT give some third party (say, his daughter) the power to shift the CRT remainder from one university department to another?

Yes, through a provision in the CRT agreement. The power can be made exercisable upon the donor’s death, for example.

6.  Can a charity receive part of the payout from a newly established CRT?

Yes. The charity is named as a payout recipient. It can’t receive the entire payout; and no charitable deduction is allowed for naming a charity to receive part of the payout.

7.  Are old U.S. coins given to charity money or tangible personal property?

Tangible personal property if the donor claims a value in excess of face amount.

by Jon Tidd, Esq

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