Important Information - Charities & Charitable Gift Planning

Charity Advisor Resource

Newsletter

Volume 1.3 -

2009

Greetings!

The Law Office of Jonathan Ackerman, LLC and Charitable Registry, LLC sponsor the Charity Advisor Resource (CAR) Newsletter. The CAR Newsletter is a tool to educate all persons with an interest in charitable organizations and charitable gift planning. The CAR Newsletter will (i) build a fundamentals track of educational information for those persons new to charities and charitable gift planning, (ii) provide an advanced track for those persons who deal with the technical issues, (iii) present case studies to provide a practical understanding of the tools and traps in closing an irrevocable charitable gift or creating a complex charitable entity, and (iv) discuss topics of current interest.

In This Issue

Featured Article - Gold as a Hot Topic Today

Technical - Charitable Contribution Deduction - Part 1 - Income Tax Issues (& Gold)

Fundamentals - How Does a Donor Own Gold?

Solicitations Corner & Some Happenings

Featured Article - Gold as a Hot Topic Today

Gold as a Charitable Gift Option

Here's some interesting facts about gold as an investment based upon an article in the Wall Street Journal:

In 2008, U.S. stocks lost 37% while bullion gained 5.5%.
Since 2002, gold prices have tripled while Dow Jones Industrial Average has dropped 10%.
Over the past 4 decades, gold has been 1/3 more volatile than the S & P's 500 stock index, but delivered a lower return - annualized 8.4% vs. 9.1% for the S & P index.
After reaching a record high of $850 per ounce in January 1980, gold's price fell almost 44% in 2 months and didn't reach $850 again until January, 2008 - meaning it was flat, while inflation rose 125%.

The current run-up of value in gold and gold-related assets, in combination with its dramatic history of volatility, makes TODAY the right time to consider a gift of gold. The donor is in a position to possibly get a fair market value deduction at a significantly appreciated value for those assets, and may correspondingly avoid the inherent taxable gain on the gifted asset. [more...]

Technical
Charitable Contribution Deduction - Part 1 - Income Tax Issues (& Gold)

Some of the income tax issues associated with a gift of gold are as follows:

Generally - Section 170(a) ("Section" shall refer to the Internal Revenue Code of 1986, as amended, unless otherwise indicated) provides for income tax charitable deductions for certain types of contributions to qualifying charitable entities. Section 170(c) defines charitable contributions. Under this Section, the general rule is that the contribution must be "to or for the use of" an entity "organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes." Different income tax rules apply depending upon the character of the charitable organization, i.e., a public charity or a private foundation. [more...]

Fundamentals
How Does a Donor Own Gold?

There a variety of means by which a donor may hold gold - some obvious, and some less so.

In any event, this discussion should at least put you on notice that gold can be held in a number of ways, each with its own layer of potential complications. A complete analysis with an expert in this regard is of the utmost importance to fully understand the nature of the assets being contributed to the charity, the ways to determine their value and the proper method to handle the consummation of the gift.

Here's a few of them and the basics:

Jewelry - this is self-explanatory.

Numismatic Coins - are collectible coins whose value surpasses that of their actual metallic content.

Bullion Coins - are recently minted coins - such as the American Gold Eagle, South African Krugerrand or Canadian Maple Leaf - whose value reflects their actual weight and content. [more...]

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Jonathan Ackerman, Esquire
Law Office of Jonathan Ackerman, LLC

Terri Ackerman, President

Charitable Registry, LLC

Disclaimer - The material in this CAR Newsletter is provided for informational purposes only and does not constitute legal or tax advice on any matter. Law Office of Jonathan Ackerman, LLC assumes no responsibility for the accuracy or timeliness of any information provided herein. This information is not a substitute for obtaining legal or tax advice from the reader's own counsel, given their own particular set of circumstances. Charitable Registry, LLC is not a law firm and does not render legal advice of any kind.

Note - Nothing in this publication is intended or written to be used and cannot be used by any person for the purpose of (i) avoiding tax penalties, or (ii) promoting, marketing or recommending to another party any transaction or matters addressed herein.