Write-Offs: Rulings on a Tax Deduction and on Oversight of Donor-Advised Funds
By Debra E. Blum
Contributor
January 10, 2002 | Read Time: 1 minute
- A donor who swapped a charitable remainder trust for a charitable gift annuity is entitled to a charitable income-tax deduction as long as the present value of the money the donor would have earned from the trust is greater than the present value of the payments the donor will receive from the annuity, the revenue service has ruled. The IRS also ruled that the donor does not have to include in his taxable income the trust’s untaxed accumulated capital gains. While the ruling applies only to the specific case involved, it serves as an indication of the IRS’s thinking on such arrangements. As is its policy, the IRS did not identify the charity or association involved (Letter Ruling 200152018).
- A charity affiliated with a trade association can oversee donor-advised funds set up by association members without jeopardizing its tax-exempt status, the revenue service has ruled. The charity had asked the IRS for permission to solicit such gifts through the trade association’s magazine and Web site and through mailings to members. Members will be able to set up donor-advised funds by making direct contributions to the charity. They will then be able to advise the charity on how they would like their money to be distributed to other nonprofit groups (Letter Ruling 200149045).
