Deducting Trust and Estate Charitable Donations: Trust Provisions and Wills, Recent Court Cases, Reporting Issues

Note: CLE credit is not offered on this program

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


Conducted on Tuesday, December 8, 2020

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will discuss the hurdles to deduct charitable contributions on estate and trust returns. Our panel of trust and estate experts will detail the considerations surrounding these deductions, including examining the relative provisions in the trust documents and wills, contributing appreciated property, recent court cases surrounding these donations, and reporting the contributions on Forms 1041 and 706.

Description

Determining whether a charitable contribution generates a deduction on an estate or trust return is complicated. Primarily, a preparer must look to the governing instrument--the trust document or will--to determine whether a contribution made (or to be made) will generate a tax deduction. Under specific circumstances, deductions are allowed even though not stipulated in these documents.

IRC Section 642(c) sets forth unique rules on the deductibility of donations. These rules differ in substantial ways from individual charitable deduction criteria. There is no adjusted gross income limitation for trusts, and trusts can contribute to foreign charitable organizations. Since trusts can be taxed themselves or carryout taxable income to beneficiaries, trust and estate practitioners and fiduciaries need to understand these rules to preserve these valuable deductions.

Specific bequests, although deductible on the estate return, are considered deductions from principal and do not generate a tax deduction. Making charitable bequests with particular assets, however, can generate significant tax savings. Even after determining the contribution is allowed, these contributions must be appropriately reported on Schedule A of Form 1041 and Schedule O of Form 706 to ensure deductibility.

Listen as our panel of trust and estate tax experts explains the caveats and considerations of making and deducting charitable contributions on estate and trust returns.

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Outline

  1. Trust and estate charitable deductions - An Overview
  2. Trusts
    1. Trust documents
    2. Internal revenue code requirements
  3. Estates
    1. Wills
    2. Internal revenue code requirements
  4. Reporting charitable contributions
    1. Form 1041
    2. Form 706
  5. Impact of recent cases
  6. Charitable alternatives

Benefits

The panel will review these and other critical issues:

  • Proper reporting of charitable deductions on Form 1041
  • Distinctions between contributions made from the corpus and those made from income
  • Types of trusts eligible to make deductible donations
  • Specific provisions in trust documents that allow for deductible contributions
  • Differences between allowable individual and trust contributions

Faculty

Lipschultz, Brent
Brent Lipschultz

Partner
EisnerAmper

Mr. Lipschultz has over 25 years of experience and is a leader in the firm’s International Wealth Planning Team....  |  Read More

Lvovsky, Lance
Lance Lvovsky, CPA

Senior Manager
Marcum

Mr. Lvovsky’s experience includes tax planning and tax compliance services to high net worth individuals, family...  |  Read More

Ure, John
John T. Ure, J.D.

Principal, Tax Services
Cherry Bekaert

Mr. Ure focuses his practice on serving the needs of high-net-worth business owners, individuals and their families. He...  |  Read More

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