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Alternatives to private
foundations If a
private foundation isn’t the best vehicle for your needs, consider these
alternatives that offer some of the flexibility of a private foundation
without the administrative expense, excise taxes and tighter
deductibility limitations:
Supporting organization. This is a tax-exempt entity established
to fund one or more operating charities. Although donors lack control
over how the organization distributes its funds, they may have some
influence over its activities.
Donor-advised fund. This fund allows you to make tax-deductible
contributions to an investment account. The fund then distributes your
contributions and earnings to a variety of charities. You can’t direct
the fund to make distributions to particular charities but you can make
recommendations, which are usually followed. Community foundations and
commercial investment companies typically manage donor-advised funds.
Remember that you can fund various causes directly by, for example,
writing a check or giving appreciated securities (provided the charity
is capable of accepting securities).
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Tax Tips News
items briefly discussed are depreciation, estate planning
for noncitizens, disability insurance and charitable gift
deduction requirements.
Read more
Private foundations
Retain control over your donated funds — for a price
It used to be that the cost
of setting up and operating a private foundation was
justified only if you planned to contribute several million
dollars. But that cost has dropped dramatically over the
years, so this strategy may be worth a look for donors
making initial contributions as low as $250,000. Of course,
whether a private foundation is right for you depends on
your circumstances. This article explores reasons to set up
a private foundation and potential pitfalls.
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Are your compensation
arrangements in compliance?
Late last year, the IRS gave
businesses a reprieve until Jan. 1, 2009, to bring
nonqualified deferred compensation arrangements and
documents into compliance. The extension is welcome news for
many companies that were wrestling with complex final
regulations under Internal Revenue Code Section 409A. But
that doesn’t mean you don’t have to comply with the
regulations yet, because “good-faith” compliance with Sec.
409A itself and IRS guidelines has been required since 2005.
Of course, the best way to demonstrate good faith is to
continue your compliance efforts. This article looks at Sec.
409A requirements, including how they affect stock options.
Read more
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Vacation homes provide tax planning opportunities,
pitfallsIf you
own a vacation home, it pays to consider the tax
implications, especially if you plan to use the home for
both personal enjoyment and rental income. In some
cases, minor adjustments in the way you use the home can
reduce your tax bill. This article reviews the
differences between residence and rental classification
of a vacation home, and the tax implications.
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