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International Charitable Giving: Friends of Structures, Donor Advised Funds, Private Foundations, IRS Registration

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, July 25, 2024

Recorded event now available

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This webinar will review vehicles individuals can use to support overseas charities and receive a U.S. charitable income tax deduction, as well as some considerations related to donations by U.S. taxpayers who live outside the U.S. and the formation and operation of private foundations.

Description

More U.S. residents want to make significant charitable contributions to causes abroad. However, under IRC 170(c)(2), donations made to foreign organizations are not deductible. Donees could make non-deductible contributions or, better still, utilize a method that would allow a tax-deductible contribution.

U.S. "Friends of" organizations can be established to raise funds on behalf of foreign charities. The organization must satisfy a strict list of IRS criteria and meet registration requirements, including completing Form 1023, Application for Recognition of Exemption Under 501(c)(3) of the Internal Revenue Code. Another alternative could be a donor-advised fund, which allows donors to make grant recommendations. Individuals also could consider creating a private foundation for even greater control over donations, although private foundations are subject to certain, more onerous rules.

U.S. taxpayers who live outside the U.S. also may want to consider whether alternatives could allow a deduction in both the U.S. and their jurisdiction of residence. International tax practitioners must understand the international giving options available and the pros and cons of each charitable method.

Listen as our panel of international tax attorneys will explain how to establish a "Friends of" organization, a private foundation (including equivalency and expenditure responsibility determinations), and other options, including donor-advised funds. Using examples and case studies, our panel will discuss the benefits and caveats of each international giving choice.

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Outline

  1. International charitable giving: introduction
  2. Deductibility of contributions
  3. "Friends of" structures
  4. Donor-advised funds
  5. U.S. private foundations
    1. Equivalency determinations
    2. Expenditure responsibility
  6. IRS registrations--Form 1023
  7. Case studies

Benefits

The panel will cover these and other critical issues:

  • The necessary steps to establish a "Friends of" organization and how to meet the IRS requirements
  • Equivalency determinations and expenditure responsibility for private foundations
  • Key considerations when utilizing a donor-advised fund for giving abroad
  • IRS rules for deductibility of contributions for overseas organizations
  • Considerations for U.S. donor taxpayers resident outside the U.S.

Faculty

Beloded, Olga
Olga R. Beloded
Partner
Curtis, Mallet-Prevost, Colt & Mosle

Ms. Beloded advises domestic and foreign corporations and high net worth individuals on tax aspects arising in...  |  Read More

Konschnik, Kristin
Kristin E. Konschnik
Attorney
MK Law London

Ms. Konschnik has practised US tax law in London for most of her career (along with stints in New York and...  |  Read More

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