Tuesday, March 28, 2017

rockefeller-center-midtown-west--new-york-city-new-york-usa_mainBillionaire David Rockefeller passed away this week at the age of 101.  According to Forbes magazine, during his lifetime, the well-known philanthropist gave away nearly $2 billion.

In light of this newsworthy charitable donation, we thought now would be a good time to remind everyone of some of the basic income tax deductions available for gifts to charities. (more…)

Wednesday, February 1, 2017

Bryan Cave’s Tax Exempt and Charitable Planning Team posted the following:

WASHINGTON — The IRS announced today the release of an updated Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, that will help tax-exempt organizations avoid common mistakes when filing their annual return.

The updated Form 990-EZ includes 29 “help” icons describing key information needed to complete many of the fields within the form. The icons also provide links to additional helpful information available on IRS.gov. These “pop-up” boxes share information to help small and mid-size exempt organizations avoid common mistakes when filling out the form and filing their return.

“We’ve been reviewing the areas of the form where exempt organizations encounter the most trouble,” said IRS Commissioner John Koskinen. “One out of three paper filers has an error on their form. After reviewing these trouble spots, we developed this new option to help groups navigate the form. This common-sense approach is designed to make it easier for exempt organizations to avoid problems up front – and avoid getting a follow-up contact from the IRS.”

On the new form, the help icons are marked in boxes with a blue question mark. The icons and underlying links work on any device with Adobe Acrobat Reader and Internet access. Once completed, filers can print Form 990-EZ and mail it to the IRS.

Although many large exempt organizations are required to file Form 990-series information returns electronically, the IRS encourages all exempt organizations to consider filing electronically.

In 2016, the error rate for electronically-filed 990-EZ returns was only 1 percent, compared to the 33 percent error rate in paper-filed returns. In 2016, the IRS processed over 263,000 Forms 990-EZ, with the majority of the filings – 139,000 — on paper.

A list of providers assisting with electronic filing is available on IRS.gov.

Exempt organizations should keep in mind that the new help icons do not replace the Form 990-EZ instructions. Filers should review the Form’s instructions when completing a return and use the help icons as an additional tool.

The IRS also reminds exempt organizations that Form 990-series returns are due on the 15th day of the fifth month after an organization’s tax year ends. Many organizations use the calendar year as their tax year, making May 15, 2017, the deadline to file for tax year 2016.

Monday, September 19, 2016

One of the many requirements that a trust must meet in order for it to qualify as a Charitable Remainder Annuity Trust (“CRAT”) is the “Probability of Exhaustion Test”.  This test applies to CRATs whose annuity term is based on one or more lifetimes, and requires the likelihood that the charitable remainder beneficiary will not receive its interest in the trust be 5% or less.  If a trust fails the test, then the charitable remainder interest does not qualify for income, gift, or estate tax charitable deductions, and the trust is not exempt from income tax. (more…)

Monday, August 22, 2016

 

amber-johnny-435

Michael Covak/ Getty Images

People.com is reporting that Amber Heard, who received a $7 million settlement in her divorce from Johnny Depp this week, is donating the entire $7 million settlement to charities with “a particular focus to stop violence against women” as well as the Children’s Hospital of Los Angeles.

In light of this newsworthy charitable donation, we thought now would be a good time to remind everyone of some of the basic income tax deductions available for gifts to charities. (more…)

Wednesday, March 9, 2016
Budget concept

Budget concept

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 252 of the Green Book and is re-printed here for your convenience:

CONSOLIDATE CONTRIBUTION LIMITATIONS FOR CHARITABLE DEDUCTIONS AND EXTEND THE CARRYFORWARD PERIOD FOR EXCESS CHARITABLE CONTRIBUTION DEDUCTION AMOUNTS

Current Law

Current law limits the amount of charitable contribution deductions a donor may claim to a share of the donor’s contribution base (the taxpayer’s AGI computed without regard to any net operating loss carryback for the taxable year). An individual taxpayer may generally deduct up to 50 percent of his or her contribution base for contributions of cash to public charities, and up to 30 percent for cash contributions to most private foundations. An individual taxpayer may generally deduct up to 30 percent of his or her contribution base for contributions of appreciated capital gain property to public charities, and up to 20 percent to most private foundations. Finally, an individual taxpayer may deduct up to 20 percent of his or her contribution base for contributions of capital gain property for the use of a charitable organization. Charitable contributions to an organization exceeding these limits may be carried forward to be deducted in the subsequent five years. Contributions for the use of an organization exceeding these limits may not be carried forward. These limitations are applied prior to the overall limitation on itemized deductions (the so-called Pease limitation). Special rules regarding percentage limitations and carry-forward periods apply for qualified conservation contributions. (more…)

Tuesday, March 8, 2016
Budget concept

Budget concept

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 240 of the Green Book and is re-printed here for your convenience:

REFORM EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE FOUNDATIONS

Current Law

Private foundations that are exempt from Federal income tax generally are subject to a two percent excise tax on their net investment income. The excise tax rate is reduced to one percent in any year in which the foundation’s distributions for charitable purposes exceed the average level of the foundation’s charitable distributions over the five preceding taxable years (with certain adjustments). Private foundations that are not exempt from Federal income tax, including certain charitable trusts, must pay an excise tax equal to the excess (if any) of the sum of the excise tax on net investment income and the amount of the unrelated business income tax that would have been imposed if the foundation were tax exempt, over the income tax imposed on the foundation. Under current law, private nonoperating foundations generally are required to make annual distributions for charitable purposes equal to five percent of the fair market value of the foundation’s noncharitable use assets (with certain adjustments). The amount that a foundation is required to distribute annually for charitable purposes is reduced by the amount of the excise tax paid by the foundation. (more…)

Friday, September 4, 2015

When: Thursday, Oct. 22, 2015, from 9 a.m. to 5 p.m.
Where: Social Sciences and Business Building — SSB # 411 on the UM-St. Louis North Campus
Fee: $89 (includes lunch)

Program Description: 
Starting a 501(c)(3) nonprofit organization and governing a 501(c)(3) nonprofit organization are flip sides of the same coin.  Steps you take in forming a 501(c)(3) nonprofit corporation affect how your organization must operate in the future. Steps you take in the governance and operation of your 501(c)(3) nonprofit corporation affect your ability to maintain your 501(c)(3) tax-exempt status with the IRS on an ongoing basis.

Come to this class to learn how to start a Missouri nonprofit corporation that will seek to obtain 501(c)(3) tax exempt status from the IRS. In addition, this class will also cover good governance policies, strategies, and requirements that will allow your organization to maintain its 501(c)(3) tax exempt status on an ongoing basis once you are up and running.

This is an intensive 8-hour class that will focus on practical information and resources like forms to use, websites to access, governmental offices to contact or be aware of, and a checklist of steps to take.

Instructor Dan Sise, JD, joined the Nonprofit Management and Leadership Program (NPML Program) at U.M. – St. Louis in October, 2008, and serves as the NPML Program’s Academic Coordinator and Community Engagement Manager. A 1997 graduate of the University of Illinois College of Law, Dan is currently licensed to practice law in Missouri and Illinois. In the course of his legal career, Dan has dealt with a wide range of issues, including regulatory compliance, insurance coverage and defense, community redevelopment, and nonprofit governance and oversight. He serves on the board of directors of a number of nonprofit organizations, including the St. Louis-Jefferson Solid Waste Management District and Mission: St. Louis. Prior to joining the faculty of the NPML program, Dan worked at Habitat for Humanity St. Louis where he was director of operations.

To register, click here.

Wednesday, June 10, 2015
image from http://en.wikipedia.org/wiki/Gateway_Arch

image from http://en.wikipedia.org/wiki/Gateway_Arch

According to area newspaper the St. Louis Post Dispatch, one of St. Louis’ wealthiest families, that of Enterprise Holdings founder Jack Taylor, is making some very large charitable donations this week–a total of $92.5 million to 13 cultural institutions and charities, most local to St. Louis.

In light of this, we thought now would be a good time to remind everyone of some of the basic income tax deductions available for gifts to charities.

Section 170 of the Internal Revenue Code (the “Code”) governs income tax deductions for charitable contributions. In the case of an individual making a cash gift to a Section 501(c)(3) organization classified as a “public charity” (such as churches, schools, hospitals, and governmental units), the gift is deductible for federal income tax purposes so long as the aggregate gifts do not exceed fifty percent (50%) of the taxpayer’s adjusted gross income (“AGI”) for the taxable year. (more…)

Wednesday, March 18, 2015

155606531 (1)A family limited partnership (“FLP”) can be a useful estate planning tool. A FLP a limited partnership where family members own the limited partnership interests and under certain circumstances may be members or owners in the entity which acts as general partner of the FLP as well. Various family members will invest in the FLP and take back interests proportionate to the capital invested. The limited partners of the FLP are not responsible for making any decisions about underlying FLP assets. They receive distributions or make capital contributions based solely on the decision of the general partner. (more…)

Monday, December 22, 2014

On Dec. 16, 2014, Congress passed the “Tax Increase Prevention Act of 2014, (“TIPA”, or “the Act”), which the President has now signed into law. The Act extends a host of individual tax provisions, including non-taxable IRA transfers to eligible charities.

Taxpayers who are age 70 ½ or older can make tax-free direct distributions to a charity from an Individual Retirement Account (IRA) of up to $100,000 per year.  These distributions aren’t subject to the charitable contribution percentage limits since they are neither included in gross income nor claimed as a deduction on the taxpayer’s return.  Under pre-Act law, these rules didn’t apply to distributions made in tax years beginning after Dec. 31, 2013.  TIPA retroactively extends this provision for one year so that it’s available for charitable IRA transfers made in tax years beginning before Jan. 1, 2015.  Therefore, there are less than two weeks to complete a charitable IRA transfer!