Planning Pointers From Recent Rulings Approving Two Set-Asides
Author: Staff Editors.
Source: Volume 03, Number 04, May/June 2004 , pp.9-9(1)
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Abstract:
When a foundation doesn’t actually distribute funds for an appropriate charitable purpose, but does set them aside for such a purpose, it is possible for the amount in question to be treated as a qualifying distribution, even though actual payment of such amounts will not be made until a later taxable year. To use this approach, the foundation has two choices: it must either (1) obtain advance IRS approval of the suitability of the set-aside or (2) comply with a narrow set of alternative rules useful primarily for newly created foundations (for the latter rules, see J.J. McCoy & K.W. Miree, Family Foundation Handbook (Panel, 2001) at §7.02[C]). The basic undertaking is to demonstrate to the IRS that the set-aside and future distribution of the funds will accomplish the objectives of the grant more effectively than a current distribution.Keywords:
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