Estate Planning and Foreign Charitable Gifting: U.S. Tax Rules for Transfers and Gifts Directed to Foreign Charities

Charitable giving can provide significant income and estate tax advantages while also satisfying charitable intent. However, obtaining deductions for charitable gifts or transfers to foreign charities involves complex tax rules for estate and tax planning purposes. To ensure these advantages for clients, tax counsel and advisers must have a complete understanding of the legal framework and tax rules applicable to charitable giving vehicles, reporting, and deductions.

For high net worth individuals, planned charitable giving to foreign charities can be a significant tax planning tool. Under current tax law, a number of planning and giving strategies are available such as the use of the bunching of deductions, qualified charitable distributions, non-cash gifting, donor-advised funds, private foundations, and other gifting methods for purposes of tax planning. However, the use of any technique, as applied to gifts and transfers to foreign charities, requires a complete understanding of all necessary items and potential challenges in implementing these strategies.

There are restrictions on income tax deductions for donations made to foreign charities. This panel will discuss structuring options to optimize charitable giving from a tax perspective.

In addition, attorneys must understand the estate and gift tax deduction rules under Secs. 2055 and 2522, the application of tax treaties, and other requirements to obtain tax deductions such as the governing document and gross income requirements, charitable purpose and eligible donee requirements, and other additional planning and reporting considerations.

Listen as our panel discusses income tax deduction rules under Secs. 170 and 642(c), the application of income tax treaties, and estate and gift tax deduction rules under Secs. 2055 and 2522. The panel will also discuss rules applicable to domestic charities making grants to foreign charities and certain rules and exceptions for private foundations.

1. Governing documents requirements
2. Charitable deduction rules and requirements
3. Reporting obligations and challenges
4. Planning considerations

The panel will discuss these and other key issues:

• Charitable deduction rules and requirements as applied to gifts and transfers to foreign charities
• Reporting of charitable deductions
• Types of trusts eligible to make deductible donations
• Specific provisions in trust documents that allow for deductible contributions
• Differences between allowable individual and trust contributions

Learning Objectives

After completing this course, you will be able to:

• Understand the charitable deduction rules and requirements for purposes of structuring charitable giving
• Ascertain key items of focus in the reporting of charitable deductions
• Recognize critical distinctions between contributions made from the corpus and those made from income
• Ascertain what types of trusts are eligible to make deductible donations
• Identify specific provisions in trust documents that allow for deductible contributions
• Understand the differences between allowable individual and trust contributions

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.