IRS Confirms Charitable Contribution Deduction for Gifts Made to Single-Member LLCs

The IRS recently announced that a contribution to a domestic LLC that is wholly owned and controlled by an IRC § 501(c)(3) charitable organization will be treated as if the contribution were made directly to the charitable organization, provided that the LLC has not elected to be taxed as a corporation. Although the IRS had previously provided guidance to public charities and private foundations as to the tax treatment of operating through such single-member LLCs, the July 31, 2012 release of Notice 2012-52 was the first guidance given to individual and corporate contributors as to the deductibility of their contributions. Left unaddressed, however, is the tax treatment of a contribution to a single-member, “disregarded entity” LLC organized in a foreign jurisdiction.

To see the announcement, click here: Notice 2012-52

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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