โ Scribed by Bruce R. Hopkins
No coin nor oath required. For personal study only.
1998 issue), the IRS is concerned that there is a growing use of "this technique to allowwealthy persons to obtain substantial charitable tax deductions while maintaining control of the property." This control is achieved "by virtue of the donor's position or influence on or over the Board of Directors of the exempt supporting organization. "
The text references a promotion, which terms the supporting organization a "private credit facility" and an "intergenerational private lending institution." This promotion observes that family members can borrow money from the supporting organization at a low interest rate, then invest the money at a higher interest rate, artfully stating that they can "pocket the difference."
Needless to say, the IRS Ands fault with this planning technique. One, this arrangement probablyviolates the control test. The IRS noted that disqualified persons may not control the supporting organization indirectly, such as
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