 |
 |
 |
||||
 |
||||||
 |
||||||
 |
||||||
 |
||||||
 |
||||||
|
How to take Control of your Finances:
YOU CAN DO IT THROUGH A PRIVATE FOUNDATION! * Check the Table of Contents on Page 9 from the book on Foundations which you can order through Lord & Carter. The next 7 pages will give you an overview of the legal foundation on which the Private Foundation is based. You may order the research book edited and compiled by Lord & Carter for a more comprehensive explanation. Lord & Carter Professional Trust & Trustee Services The Charitable Foundation Trust a coat of many colors based on Section 170 of the I.R.S. Code, U.S.C. Title 26 Introduction: To many people the information contained in this booklet might better have been published in "Ripley's Believe It or Not"! That, however, is not the fault of the researchers and editors of this material, but only of the lack of tax, financial estate planning, and fiduciary education available to a major segment of today's population. Did you know that any one may "contribute" 50% of one's 1040 income [adjusted gross income] to a non-exempt organization established for any of the purposes listed in the I.R.S. Code, Section 170? Did you know that such an organization may "permanently set aside for charitable purposes" certain allocated sums [as defined by the trust indenture or as specified by the Board of Trustees] and may also "set aside a certain sum to create or add to the 'corpus' of the trust [as defined by the trust indenture or as specified by the Board of Trustees]? Did you know that those two documented entries create dollar for dollar deductions for such an organization before there is computed any taxable income? The following are direct quotes, excerpts from U.S.C. Title 26, the Internal Revenue Code. Try analyzing the following statements of "tax law" and form your own conclusions. The statements from U.S.C. Title 26, the Internal Revenue Code, are also restated in the instructional pages on How to Fill out I.R.S. Forms 1041, 1041-A and the related lines in Form 1040. U.S.C. Title 26, the Internal Revenue Code: Section 170 of U.S.C. Title 26, the Internal Revenue Code: CHARITABLE, ETC. CONTRIBUTION AND GIFTS. Section 170(a): (a) ALLOWANCE OF DEDUCTION-- (1) GENERAL RULE--There shall be allowed as a deduction any charitable contribution (as defined in subsection (c) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary. Section 170(b) (b) PERCENTAGE LIMITATIONS (1) INDIVIDUALS--In the case of an individual, the deduction provided in subsection (a) shall be limited as provided in the succeeding subparagraphs. (A) GENERAL RULE--Any charitable contribution to-- (i) a church or a convention or association of churches, (ii) an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on, (iii) an organization the principal purpose or functions of which are the providing of medical or hospital care or medical education or medical research, if the organization is a hospital, or if the organization is a medical research organization directly engaged in the continuous active conduct of medical research in conjunction with a hospital, (iv) an organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under 501(a) from the United States or any State or political subdivision...., (vii) a private foundation described in subparagraph (E), shall be allowed to the extent that the aggregate of such contributions does not exceed 50 percent of the taxpayer's contribution base for the taxable year. (F) CONTRIBUTION BASE DEFINED--For purposes of this section, the term "contribution base" means adjusted gross income .
Section 170(c) (c) CHARITABLE CONTRIBUTION DEFINED--For purposes of this section, the term "charitable contribution" means a contribution or gift to or for the use of-- (1) A State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes. (2) A corporation, trust, or community chest, fund, or foundation-- (A) created or organized in the United States or in any possession thereof, or under the law of the United States, any State, the District of Columbia, or any possession of the United States, (B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. (C) no part of the net earnings of which inures to the benefit of any private shareholder or individual, and (D) which is not disqualified for exclusion under section 502(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. (3) A post or organization of war veterans... (4) In the case of a contribution or gift...operating under the lodge system...only if such contribution or gift is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. (5) A cemetery company owned and operated exclusively for the benefit of its members, or any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, if such company or corporation is not operated for profit and no part of the net earnings of such company or corporation inures to the benefit of any private shareholder or individual. Section 507: TERMINATION OF PRIVATE FOUNDATION STATUS Section 507(a): (a) GENERAL RULE--except as provided in subsection (b), the status of any organization as a private foundation shall be terminated only if-- (1) such organization notifies the Secretary (at such time and in such manner as the Secretary may be regulations prescribe) of its intent to accomplish such termination, or (2)(A) ... Section 642(c) (c) DEDUCTIONS FOR AMOUNTS PAID OR PERMANENTLY SET ASIDE FOR A CHARITABLE PURPOSE-- (1) GENERAL RULE--In the case of an estate or trust (other than a trust meeting the specifications of sub part B), there shall be allowed as a deduction in computing its taxable income (in lieu of the deduction allowed by section 170(a), relating to deduction for charitable, etc., (contributions and gifts) ANY AMOUNT OF THE GROSS INCOME, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, paid for a purpose specified in section 170(c) (determined without regard to section 170(c)(2)(A)). If a charitable contribution is paid after the close of such taxable year and on or before the last day of the year following the close of such taxable year, then the trustee or administrator may elect to treat such contribution as paid during such taxable year. The election shall be made at such time and in such manner as the Secretary prescribes by regulations. (2) AMOUNTS PERMANENTLY SET ASIDE--In the case of an estate, and in the case of a trust (other than a trust meeting the specifications of sub part B) required by the terms of its governing instrument to set aside amounts which was there shall also be allowed as a deduction in computing its taxable income any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.... (6) TAXABLE PRIVATE FOUNDATIONS--In the case of a private foundation which is not exempt from taxation under section 501(a) for the taxable year, the provisions of this subsection shall not apply and the provisions of section 170 shall apply. (8) POWER TO ALLOCATE BETWEEN CORPUS AND INCOME--A power to allocate receipts and disbursements as between corpus and income, even though expressed in broad language. Section 674(d) (d) POWER TO ALLOCATE INCOME IF LIMITED BY A STANDARD--Subsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor or spouse living with the grantor, to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries, whether or not the conditions of paragraph (6) or (7) of subsection (b) are satisfied, if such power is limited by a reasonable definite external standard which is set forth in the trust instrument. Section 2055 of the Internal Revenue Code explains the process of TRANSFERS FOR PUBLIC, CHARITABLE, AND RELIGIOUS USES. Section 2522 CHARITABLE AND SIMILAR GIFTS Section 2522(a) (a) CITIZENS OR RESIDENTS--In computing taxable gifts for the calendar year, there shall be allowed as a deduction in the case of a citizen or resident the amount of all gifts made during such year to or for the use of-- (1) the United States, any State, or any political subdivision thereof, or the District of Columbia, for exclusively public uses, (2) a corporation , or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition..., including the encouragement of art and the prevention of cruelty to children or animals, no part of the new earnings of which inures to the benefit of any private shareholder... (3) a fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used exclusively for religious, charitable, scientific \, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals. (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual. Section 2522(b) (b) NONRESIDENTS--In the case of a nonresident not a citizen of the United States, there shall be allowed as a deduction the amount of all gifts made during such year to or for the use of-- (1) the United States, any State, or any political subdivision thereof, or the District of Columbia, for exclusively public uses, (2) a domestic corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the new earnings of which inures to the benefit of any private shareholder... (3) a trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no substantial part of the activities of which is carrying on propaganda... but only if such gifts are to be used within the United States exclusively for such purposes, (4) a fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used within the United States exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals. (5) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual. Section 4947: APPLICATION OF TAXES TO CERTAIN NONEXEMPT TRUSTS. Section 4947(a) (a) Application of Tax-- (1) CHARITABLE TRUSTS--For purposes of part II of subchapter F of chapter I (other than section 508(a), (b), and (c) and for purposes of this chapter, a trust which is not exempt from taxation under section 501(a), all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B), and for which a deduction was allowed under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 (or the corresponding provisions of prior law), shall be treated as an organization described in section 501(c)(3). For the purpose of section 509(a)(3)(A), such a trust shall be treated as if organized on the day on which it first becomes subject to this paragraph. If you would like more information, please fill out the following form.
|
Types of Trusts
|
|||||
 |
 |
 |
 |
 |
 |
 |
 |
||||||
 |
||||||
