Charitable Donations of LLC and Limited Partnership Interests to Nonprofits

Avoiding Negative Tax Consequences for Public Charities, Private Foundations, and Donor-Advised Funds

A live 110-minute CPE video webinar with interactive Q&A

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Monday, November 21, 2022

1:00pm-2:50pm EST, 10:00am-11:50am PST

Early Registration Discount Deadline, Friday, October 28, 2022

or call 1-800-926-7926

This course will provide nonprofit organization professionals and counsel with a practical guide to the planning and reporting implications when a donor contemplates gifting an interest in a partnership or an LLC to an exempt organization. The panel will outline gifting impacts to donors, detail the due diligence requirements and possible tax consequences to the donee charity, and offer operational insights. The webinar will also describe the differences in treatment between gifts to public charities vs. private foundations.

Description

For many clients owning interests in limited partnerships or LLCs, a component of charitable tax planning involves donating some or all of their interests in those entities to exempt organizations. While many charities are hesitant to accept contributions of partnership or LLC units, these donations can be of value to the exempt organization. Still, the nonprofit adviser must understand the operational risks and exit strategy of holding the asset.

Exempt organization advisers should have a firm understanding of the tax consequences of contributions of limited partnership or LLC interests to the donor and the donee organization. Advisers can play a critical role in structuring tax-efficient donative transfers that benefit both the donor and the tax-exempt charity.

The exempt organization can help facilitate the contribution by performing due diligence on the partnership or LLC. Key elements include determining whether the entity generates any unrelated business taxable income, whether the entity's operating agreement provides contribution requirements, including capital calls, and whether the business has any hidden liability risks.

Additionally, advisers to clients with private foundations or donor-advised funds should also be aware of the tax implications of partnership or LLC interest gifts to avoid unanticipated, adverse tax consequences.

Listen as our experienced panel provides a practical guide to the tax issues and opportunities involved with charitable contributions of partnership or LLC interests.

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Outline

  1. Structure of partnership or LLC interest donations
  2. Cash flow considerations
  3. Due diligence requirements by donee charity
  4. UBTI traps
  5. Factors unique to private foundations and donor-advised funds

Benefits

The panel will discuss these and other vital issues:

  • What are the benefits--and risks--of charitable contributions of partnership and LLC interests to an exempt organization?
  • What due diligence must the exempt organization advisers undergo to ensure that a partnership or LLC interest contribution does not involve tax, operational, or cash-flow risk to the donee charity?
  • What factors unique to private foundations and donor-advised funds impact charitable contributions of partnership or LLC interests?
  • How should an exempt organization structure a donative transaction of a partnership or LLC interest?

Faculty

Nussbaum, Amanda
Amanda H. Nussbaum

Partner
Proskauer Rose

Ms. Nussbaum advises not-for-profit clients on matters such as applying for and maintaining exemption from federal...  |  Read More

Sanders, Michael
Michael I. Sanders

Partner
Blank Rome

Mr. Sanders focuses his practice in the area of taxation, particularly in matters affecting partnerships, limited...  |  Read More

Attend on November 21

Early Discount (through 10/28/22)

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Early Discount (through 10/28/22)

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