Charity Advisor Resource
Volume 2.1 -
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 - Really? ... Estate Tax Repeal - What's Next for Charitable Gift Planning
Technical - Charitable Contribution Deduction - Part 2 - Income Tax Issues (& Gold)
Fundamentals - Charitable Lead Trust - Part 3
Some Happenings
Featured Article - Really? ... Estate Tax Repeal - What's Next for Charitable Gift Planning

Yesterday is history, tomorrow a mystery and today is a gift: that's why we call it the PRESENT - Aish Hatorah Weekly


It appears that Congress will make no change in the estate tax law for the year 2010, and thus, the repeal of the estate and generation-skipping tax for decedents dying in 2010 is likely to be a reality. Many of you may have noted that families of wealth have already publicly announced that heirs will fight the IRS in the event Congress determines to reinstate the estate tax retroactive to January 1, 2010.


Here are a few random thoughts about the rest of this year -


What may be in Vogue in Charitable Gift Planning?


Charitable Remainder Trusts - The Economic Growth and Tax Relief Reconciliation Act of 2001 (which created the 2010 estate tax repeal) also contains a carryover tax basis rule - thus, assets received by a beneficiary pursuant to a will, trust or intestacy from a decedent dying in 2010 will generally take those assets with a carryover basis (for instance, the same basis as in the hands of the decedent). However, current law also provides for a step-up in basis for assets up to One Million Three Hundred Thousand Dollars, plus another Three Million Dollar step-up for transfers to a spouse or to a QTIP trust. So, those beneficiaries receiving assets at a carryover basis may be looking for a means to avoid the capital gains on the ultimate sale of those assets. And if the capital gains rates rise (as under current law), those beneficiaries may be even more motivated donors, seeking vehicles to avoid those taxes while placing an irrevocable deferred gift to charity. [more...]

Charitable Contribution Deduction - Part 2 - Income Tax Issues (& Gold)
Gold continues its record highs in value, but also remains an historically volatile asset, See, CAR Newsletter 1.3 - 2009 for the Hot Topics article. For those who felt that a discussion of gold as a gift asset was ill-timed or too unusual to apply, I have had discussions with different professionals who have worked on six figure gifts of gold in various forms. Thus, it may be just the right time to discuss with your donors and clients that gold is the perfect asset to give to charity outright or through a planned giving vehicle.

The Technical Article in CAR Newsletter 1.3 - 2009 contains a general description of the charitable income tax deduction issues relating to a gift of gold. This article will address some of the specific IRS rulings associated with a gift of gold. [more...]

Charitable Lead Trust - Part 3

Considering the fact that interest rates have again reached an historic low, presenting a few more fundamental CLT concepts may prove beneficial.


Estate and Gift and Income Tax Regimes - The estate and gift tax regime is separate and apart from the income tax regime. The estate and gift tax regime taxes the transfer of wealth, whereas the income tax regime taxes the earning of income.  Although the two regimes may overlap in the charitable gift planning arena, they remain separate and must be independently considered in structuring a CLT. For instance, a non-grantor CLT is, from a tax perspective, created to minimize the estate and gift taxes on a transfer of a remainder interest to heirs; whereas a grantor CLT is generally created to maximize the income tax planning for the donor.


Income Taxation of Trusts and CLTs - 

The administration of a CLT can be tricky, because the CLT is not a tax-exempt entity, like a CRT. The concept that applies to the income taxation of a CLT is somebody's paying the taxes. [more...]
We hope you find the CAR Newsletter of value. If you want to forward this CAR Newsletter, please click on "Forward the CAR Newsletter to your friend!" link below - your friend can then click on the "Sign Up for the CAR Newsletter" link on the side panel to receive future issues. You are already signed up to receive the CAR Newsletter; however, you may unsubscribe at any time by clicking on the "SafeUnsubscribe" link below. Thank you.
Jonathan Ackerman, Esquire
Law Office of Jonathan Ackerman, LLC 
Terri Ackerman, President
Charitable Registry, LLC
Copyright 2010 Law Office of Jonathan Ackerman, 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.


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Jonathan Ackerman


Some Happenings

SMALL CHARITIES LAST CHANCE TO AVOID REVOCATION - BEWARE - OCTOBER 15, 2010 DEADLINE - The Pension Protection Act of 2006 made two important changes affecting tax-exempt organizations, effective the beginning of 2007. First, the law required that any tax-exempt organization that fails to file for 3 consecutive years automatically loses its federal tax-exempt status. The IRS recently announced that small nonprofit organizations at risk of losing their tax-exempt status due to the failure to file returns for 2007, 2008 and 2009 can nonetheless preserve their status by filing returns by October 15, 2010 under a one-time relief program.  [more...]


MD ADOPTS JOINTLY-OWNED PROPERTY CREDITOR PROTECTION & REVOCABLE TRUST - The Maryland General Assembly passed interesting new legislation (SB 25) designed to free Maryland estate planners from the inflexibility of tenancies by the entirety in situations where tenancy by the entireties-like asset protection is important.  [more...] 

MD ADOPTS NEW UNIFORM POWER OF ATTORNEY ACT - The Maryland General and Limited Power of Attorney Act has also been adopted and for the first time codifies an agent's responsibilities to his or her principal, among other things. IMPORTANT - a power of attorney executed on or after October 1, 2010 must be executed with the same formalities as a will and acknowledged before a notary public. [more...] 
THE EFFECT OF THE ECONOMY ON THE NONPROFIT SECTOR - Guidestar has released a June 2010 survey on charities and charitable giving. [more...]
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