2020 has been unlike any year in recent memory. Americans have witnessed economic losses from COVID-19, civil unrest as a result of racial injustice and a divided political atmosphere unlike any other. With these ongoing challenges, many nonprofits have struggled to find the right fundraising messaging. Most experts are predicting that overall giving will decrease …Read More
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
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
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
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
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
The Guest case shows how to reap benefits from and avoid problems with a real estate gift. The donor in Guest wrote a letter to Charity stating that he, by the letter, gave two properties to Charity. Wanting the gift but not wanting to be in the chain of title, Charity wrote back to the …Read More
The first quarter of 2019 began with the DOW and other stock market indexes seeing a significant decline. There were growing concerns over the economy, which created a challenging environment for charitable giving. By mid-year, half of the charitable organizations indicated their fundraising results were flat or down compared to the previous year. The economy …Read More
Some individuals who own real estate like the idea of swapping the real estate for a gift annuity. Especially if they’ve grown tired of managing the property and see the gift annuity as a good way of replacing the income the property provides. This can be a good deal for the donor. And a bad …Read More
The IRS discount rate (7520 rate) has a big effect on charitable remainder annuity trust (CRAT), charitable lead annuity trust (CLAT) and gift annuity calculations but has almost no effect on unitrust calculations. CRAT calculations: The 7520 rate adversely affects two CRAT calculations: [1] the charitable remainder calc and [2] the 5% probability calc … …Read More