The Tax Court, in a case of first impression, has recently ventured into the perpetuity minefield. One Dr. Douglas Carroll and spouse Deirdre Smith, of Baltimore, Maryland, conveyed a conservation easement in 2005 over approximately 26 acres of open land in Maryland, mostly pastureland zoned for agricultural uses, to the Maryland Environmental Trust (MET) and the Land Preservation Trust (LPT). The former organization is a quasi-governmental agency, the latter a private, nongovernmental exempt organization. The protected property consisted of two parcels of unequal size; upon the smaller parcel sat the taxpayers’ two-story primary residence, and, on the larger, a small (1,000-square-foot) house where a farmhand tenant resided.
The IRS Office of Chief Counsel recently released Information Letter 2016-0036 in response to questions regarding the taxation of crowdfunding revenue. In it the IRS concluded that crowdfunding revenue is taxable to the extent it is received in exchange for services or property.
In recent years, private foundations increasingly have sought to incorporate socially responsible investing (“SRI”) mandates. Some SRI mandates take the form of negative screens—e.g., screening out tobacco stocks. Other SRI approaches are more proactive—e.g., a foundation focusing on disease eradication might invest in companies that develop vaccines. However, there has been a view—accurate or not—that some socially responsible investments yield lower risk-adjusted financial returns than traditional investments (such investments are sometimes referred to as “concessionary”).
Accordingly, when a foundation engages in an SRI program, several legal issues arise.