Leaving Money on the Table: And Getting It Back from the IRS

Nonprofit and Tax-Exempt Organizations attorney Shelley Hurwitz published an article in the Southern California Council of Charitable Gift Planners Newsletter addressing common mistakes and misconceptions surrounding charitable contributions from trusts and estates. Ms. Hurwitz says one of the most common errors she encounters is unnecessary taxes, as lay and professional fiduciaries alike incorrectly assume that taxes must be paid on income while a trust or estate holds assets. However, she explains, the actual rule in the Internal Revenue Code allows for a deduction for amounts "permanently set-aside" for charitable purposes, even if the funds will not be paid to the charity until later in the future. She explains what "permanently set-aside" means before going on to describe a typical scenario exemplifying this mistake and how to respond to ensure funds end up with where they belong — with an organization instead of the IRS.

READ: Leaving Money on the Table: And Getting It Back from the IRS