Monday, May 30, 2005
Alex E. Nakos, a shareholder in the Dallas, Texas firm of Malouf Lynch Jackson & Swinson, has recently published the second part of his comprehensive discussion of Maximizing Benefits from Gifts of Interests in (or Income from) Business Entities, Part 2, Prob. & Prop., May/June 2005, at 47.
Here is Mr. Nako's conclusion:
Most donors are concerned not only with the net cost to the donor of making a charitable contribution but also with the net benefit that the charity will receive from the contribution. Thus, a donor contemplating a gift of an interest in a flow-through entity to a charitable organization must carefully plan the contribution so as to (1) maximize the donor's charitable contribution deduction, (2) minimize any gain recognized by the donor as a result of the contribution, (3) minimize the amount of UBIT the charity will receive between the date of the gift and the date the charity disposes of the property, and (4) minimize the effective tax rate applicable to any UBIT the charity will receive. Usually, this will require much collaboration among the donor, the charity, and their respective accountants and attorneys.