Those familiar with conservation easements know that to qualify for a federal tax deduction, a conservation easement must meet several rigorous requirements found in Internal Revenue Code Section 170 and Section 1.170A-14 of the Treasury Regulations, not the least of which is the requirement that the easement be granted “in perpetuity.” In addition, the easement must be subject to “legally enforceable restrictions” (such as by recordation) that will prevent uses inconsistent with the conservation purposes of the donation.
While those working in social enterprise are still grappling with how to define it, Professor of Law Lloyd Hitoshi Mayer of Notre Dame Law School takes a look at social enterprise through the lens of domestic tax law, and explores whether it is necessary or desirable to modify existing law to better accommodate social enterprise. Read the paper here.
See Mayer, Lloyd Hitoshi, Creating a Tax Space for Social Enterprise (June 22, 2017). Notre Dame Law School Legal Studies Research Paper No. 1724. Available at SSRN: https://ssrn.com/abstract=2991120
Due to increased valuation of public and private equities, coupled with the upcoming end of the sunset provision that allows hedge fund managers to defer taxation on fees earned offshore, there is an increased interest among hedge fund and private equity managers to donate a portion of their fund interests to charity. The goal is to allow a manager to avoid ordinary income or capital gains tax and/or to obtain a tax deduction while accomplishing his or her philanthropic goals. In order to make the most of any such charitable giving plan, managers need to appreciate that the amount of any charitable deduction will vary depending on the character of the donated property and the type of organization that receives the gift.
The February 15, 2017 deadline for nonprofit organizations in California seeking to initially obtain or renew exemption from property taxes is quickly approaching, and there are changes to the reporting requirements if your organization allows third parties to use your property.
An increased concern amongst many tax-exempt organizations is how to report use of their property by private persons or non-exempt organizations.
It seems that San Francisco may have just partially removed its exception from transfer tax that applied to gifts, but the Office of the Assessor-Recorder may not be aware. As a bit of background, transfer tax applies to transfers of interests in real property and, in some cases, to transfers of interests in legal entities that own real property. Transfer tax applies to transfers of interests in a legal entity when enough of the interests in the entity are transferred so as to result in a deemed “change of ownership” of the real property that it owns. Continue Reading Did San Francisco Eliminate its Transfer Tax Exception for Certain Gifts?
On November 4, 2016, the IRS updated its Conservation Easement Audit Techniques Guide (CE Audit Guide) for the first time since March 15, 2012.
According to the IRS’s introduction on its Audit Techniques Guide website, Audit Techniques Guides (ATGs) are developed to help IRS examiners during audits by explaining issues and accounting methods within specific industries. ATGs are also meant to provide guidance to small business owners and tax professionals for tax planning purposes within those industries. However, each ATG contains a disclaimer that it is not “an official pronouncement of the law or position of the Service and cannot be used, cited, or relied upon as such.” This article will not explain the CE Audit Guide in depth, but rather discuss the specific updates made in November.
A new private ruling may be of great interest to clients with substantial real estate interests who wish to contribute one or more properties to a family foundation. The ruling suggests that payment by the foundation to a property management entity controlled by the donor may be permissible under the personal services exception.
A Brief Case Study: Your nonprofit’s founder sends out an email in their official capacity to all of its members urging the them to vote for or against a political candidate or for or against a local proposition.
It may be a well-intended gesture, but a mistake that could result in excise taxes or the potential loss of your organization’s tax-exempt status.
The case of Salus Mundi Foundation et al v. Commissioner
On August 15, 2016, the Tax Court decided in Salus Mundi Foundation et al v. Commissioner, T.C. Memo. 2016-154, that two foundations were liable as transferees for a corporation’s unpaid federal tax liability after another foundation distributed to the foundations the proceeds of the sale of the corporation’s stock.
The history in this case involves a marital trust that initially owned all of the stock in a C corporation called Double-D Ranch. Later, a portion of the stock was transferred to the Diebold Foundation in New York. Subsequent to that, the Diebold Foundation in New York sold the stock and distributed the proceeds from the sale of Double-D Ranch stock to three foundations formed by the Diebold children, pursuant to a New York state-approved plan of dissolution.
This month more than 2,500 people gathered at the ninth Social Capital Markets (SOCAP) conference, billed as the intersection of money and meaning. The conference is designed to be the place where businesses built to solve the biggest problems meet investors, peers, partners and those who make it happen. Launched in 2008 in the midst of the economic crises, the conference has grown is size and scope. Coblentz was thrilled to have had the opportunity to sponsor, attend and speak at this event and we came away with the following takeaways: