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A donor-advised fund has some disadvantages compared to a private foundation, and some advantages. Both can accept donations of unusual or illiquid assets (e.g., part ownership of a private company, art, real estate, partnerships or limited partnership shares), but a donor-advised fund has higher deductions for these gifts (depending on the gift).
In order for it to work, an individual must specify that the gift amount does not exceed $15,000 annually, per beneficiary and is part of the trust when it is drafted. Payments as a means for support can be exempt from gift tax in the case of payments for room and board or higher education that is a legal obligation for children or other ...
A contribution to a charitable organization need not be fully a "gift" in the statutory sense of the word to be deductible to the donor. The donor's allowable deduction will be reduced, however, by the amount of the "substantial benefit" conferred upon them as a result of their contribution. [1]
Generally, if an interest in a property is transferred during the giver's lifetime (often called an inter vivos gift), then the gift or transfer would not be subject to the estate tax. In 1976, Congress unified the gift and estate tax regimes, limiting the giver's ability to circumvent the estate tax by giving during their lifetime.
If an organization is to qualify for tax exempt status, the organization's (a) charter — if a not-for-profit corporation — or (b) trust instrument — if a trust — or (c) articles of association — if an association — must specify that no part of its assets shall benefit any people who are members, directors, officers or agents (its principals).
The Tax Cuts and Jobs Act (TCJA) of 2017 put an end to the deductibility of financial advisor fees, as well as a number of other itemized deductions. As of January 2018, these fees no longer ...
However, the annual gift exclusion from the gift tax ($17,000 per individual and $34,000 per married couple as of 2023 [1]) is only available for gifts of so-called present interests. Normally, a gift into a trust that comes under control of the beneficiary at a future date does not constitute a present interest. [2]
The U.S. Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of §162(a), [9] which allows the taxpayer to deduct all the "ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business."