CHARITY NAVIGATOR

Charity Navigator, America's leading independent charity evaluator, works to advance a more efficient and responsive philanthropic marketplace by evaluating the Financial Health and Accountability and Transparency of America's largest charities.  

http://charitynavigator.org/ 


Below is just a sampling of some of the information available on this website:

Top Ten Lists At Charity Navigator, we recognize that charity evaluation may not be the most scintillating of topics for most observers. That said, we are constantly searching for ways to help givers navigate a crowded marketplace, and to make this often-complex subject a tad more interesting. In the following Top 10 Lists, we identify those charities in our database that meet certain desirable or undesirable patterns of performance. As with all of our ratings of charities, the inclusion of each charity in this list is based entirely on whether or not it matched the criteria we defined for the list. In other words, we included charities based on how they performed in our rating system, not on our subjective opinions of those charities.

Furthermore, our lists are dynamic. The charities on each list changes when we publish updated and new charity ratings. We publish new ratings data on the first of each month. As such, users are invited to return to the site on a monthly basis to see how the composition of our Top 10 lists have changed.

• 10 Charities Expanding in a Hurry
• 10 Most Frequently Viewed Charities
• 10 Celebrity-Related Charities
• 10 Super-Sized Charities
• Top 10 Non-University Education Charities
• 10 Charities Overpaying their For-Profit Fundraisers
• 10 Highly-Rated Charities with Low Paid CEOs
• 10 Charities with the Most Consecutive 4-Star Ratings
• 10 Top-Notch Charities
• 10 Charities with the Most Consecutive 4-Star Ratings (Excluding Universities)
• Top 10 Highly Rated Charities with Favorable Reviews
• 10 Well Known Charities without Reviews
• 10 Highly Rated Education Charities with the Most New Reviews
• 10 Charities Routinely in the Red
• 10 Highly Rated Charities Relying on Private Contributions
• 10 of the Best Charities Everyone's Heard Of
• 10 Charities in Deep Financial Trouble
• 10 Charities Worth Watching
• 10 Highly Paid CEOs at Low-Rated Charities
• 10 Inefficient Fundraisers

Posted in November but has been updated since...

Frequently Asked Questions on Gift Taxes
 

Below are some of the more common questions and answers about Gift Tax issues. The laws on Estate and Gift Taxes are considered to be some of the most complicated in the Internal Revenue Code. For further guidance, we strongly recommend that you visit with an estate tax practitioner (Attorney or CPA) who has considerable experience in this field. You may also find additional information in Publication 950 or some of the other forms and publications offered on our Forms Page.  Included in this area are the instructions to Forms 706 and 709.  Within these instructions, you will find the tax rate schedules to the related returns.

    Who pays the gift tax?
    What is considered a gift?
    What can be excluded from gifts?
    May I deduct gifts on my income tax return?
    How many annual exclusions are available?
    What if my spouse and I want to give away property that we own together?
    What other information do I need to include with the return?
    What is "Fair Market Value?"
    Who should I hire to represent me and prepare and file the return?
    Do I have to talk to the IRS during an examination?
    What if I disagree with the examination proposals?
    What if I sell property that has been given to me?

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

    Gifts that are not more than the annual exclusion for the calendar year.
    Tuition or medical expenses you pay for someone (the educational and medical exclusions).
    Gifts to your spouse.
    Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.

May I deduct gifts on my income tax return?
Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). If you are not sure whether the gift tax or the estate tax applies to your situation, refer to Publication 950, Introduction to Estate and Gift Taxes.

How many annual exclusions are available?
The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, and $13,000 on or after January 1, 2009, the annual exclusion applies to each gift.

What if my spouse and I want to give away property that we own together?
You are each entitled to the annual exclusion amount on the gift. Together, you can give $22,000 to each donee (2002-2005) or $24,000 (2006-2008), $26,000 (effective on or after January 1, 2009).

What other information do I need to include with the return?
Refer to Form 709 (PDF), 709 Instructions and Publication 950. Among other items listed:

    Copies of appraisals.
    Copies of relevant documents regarding the transfer.
    Documentation of any unusual items shown on the return (partially-gifted assets, other items relevant to the transfer(s)).

What is "Fair Market Value?"
Fair Market Value is defined as: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." Regulation §20.2031-1.

Who should I hire to represent me and prepare and file the return?
The Internal Revenue Service cannot make recommendations about specific individuals, but there are several factors to consider:

    How complex is the transfer?
    How large is the transfer?
    Do I need an attorney, CPA, Enrolled Agent (EA) or other professional(s)?

For most simple, small transfers (less than the annual exclusion amount) you may not need the services of a professional.

However, if the transfer is large or complicated or both, then these actions should be considered; It is a good idea to discuss the matter with several attorneys and CPAs or EAs. Ask about how much experience they have had and ask for referrals. This process should be similar to locating a good physician. Locate other individuals that have had similar experiences and ask for recommendations. Finally, after the individual(s) are employed and begin to work on transfer matters, make sure the lines of communication remain open so that there are no surprises.

Finally, people who make gifts as a part of their overall estate and financial plan often engage the services of both attorneys and CPAs, EAs and other professionals. The attorney usually handles wills, trusts and transfer documents that are involved and reviews the impact of documents on the gift tax return and overall plan. The CPA or EA often handles the actual return preparation and some representation of the donor in matters with the IRS. However, some attorneys handle all of the work. CPAs may also handle most of the work, but cannot take care of wills, trusts, deeds and other matters where a law license is required. In addition, other professionals (such as appraisers, surveyors, financial advisors and others) may need to be engaged during this time.

Do I have to talk to the IRS during an examination?
You do not have to be present during an examination unless IRS representatives need to ask specific questions. Although you may represent yourself during an examination, most donors prefer that the professional(s) they have employed handle this phase of the examination. You may delegate authority for this by executing Form 2848 "Power of Attorney."

What if I disagree with the examination proposals?
You have many rights and avenues of appeal if you disagree with any proposals made by the IRS.  See Publications 1 and 5 (PDF) for an explanation of these options.

What if I sell property that has been given to me?
The general rule is that your basis in the property is the same as the basis of the donor. For example, if you were given stock that the donor had purchased for $10 per share (and that was his/her basis), and you later sold it for $100 per share, you would pay income tax on a gain of $90 per share. (Note: The rules are different for property acquired from an estate). [ Link to Estate Tax Q&A ]

Most information for this page came from the Internal Revenue Code: Chapter 12--Gift Tax (generally Internal Revenue Code §2500 and following, related regulations and other sources)

If you have suggestions or comments (or suggested FAQs) for the Estate and Gift Tax web site, please contact us: CONTACT ESTATE AND GIFT TAX.  We will not be able to respond to your email, but will consider it when making improvements or additions to this site.

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1

_Gift Tax Basics

Posted By: Debbie - 05/21/2011 17:04   

The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax, someone with a sizable estate could give away a large portion of their property before death and escape estate taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. Yet few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.
 
Advantages of Gift Giving
 
You may have many reasons for making gifts - some people have personal motives, others are motivated by tax considerations. Many want their gift-giving program to meet both personal and tax-planning objectives. Reasons for considering a gift-giving plan include:
 
• Assisting someone in immediate financial need
 
• Providing financial security for the recipient
 
• Giving the recipient experience in handling money
 
• Seeing the recipient enjoy the gift
 
• Taking advantage of the annual exclusion
 
• Paying a gift tax now to reduce overall taxes
 
• Giving tax-advantaged gifts to minors
 
Gift Tax Annual Exclusion
 
Perhaps the easiest way to reduce the size of your taxable estate is to make regular use of the gift tax annual exclusion. You may give up to $12,000 each year to as many persons as you want without incurring any gift tax. (Congress has now indexed this gift level to inflation; however, the figure will rise only in increments of $1,000.) If your spouse joins in making the gift (by consenting on a gift tax return), you may (as a couple) give $24,000 to each person annually without any gift tax liability.
 
Unlimited Gift Tax Exclusion
 
In addition to the $12,000 exclusion, there is an unlimited gift tax exclusion available to pay someone's medical or educational expenses. The beneficiary does not have to be your dependent or even related to you, although payment of a grandchild's expenses is a common use of the exclusion. You must make the payment directly to the institution providing the service -- the beneficiary himself or herself must not receive the payment.
 
Gift Programs and Your Estate
 
Use of the gift tax exclusion in a single year may not affect your estate tax situation significantly, but you can reduce your taxable estate substantially through a planned annual program of $12,000 gifts ($24,000 if you are married). All gifts within the exclusion limits are protected from federal estate taxes.
 
In addition to reducing the size of your estate, another major tax advantage of making a gift is the removal of future appreciation in the property's value from your estate. Suppose that you give stocks worth $50,000 to your children now. If you die in 10 years and the stock is worth $130,000, your estate will escape tax on the $80,000 appreciation even though you pay a gift tax on your next tax return.
 
To learn more about gifting strategies and how they can play a role in your tax and estate planning, contact us to schedule a consultation. We'll be happy to help.
 
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice.  Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Past performance is no guarantee of future results. Diversification does not ensure against loss. Source: Financial Visions, Inc.

SOURCE

_MAY 26, 2011

IRS Scrutinizes Gifts of Real Estate

By ARDEN DALE

The Internal Revenue Service has a low-profile but sweeping effort under way to use state land-transfer records for evidence of omissions in reporting gifts of real estate to family members.

Beth Shapiro Kaufman, a partner in the private-client group at law firm Caplin & Drysdale in Washington, D.C., said many tax advisers may not be aware of the IRS effort. She added that as the agency gets records from more states, "we can expect additional examinations."

New tax rules have made big gifts to family members popular this year, as Congress raised the limit on how much a person can give in a lifetime to $5 million without having to pay gift tax. Still, any time a gift to one person exceeds $13,000, the giver is supposed to let the agency know in a filing.

Details of the IRS effort were revealed in a request to a federal judge in California for a John Doe summons for data that the agency wanted to serve on that state's State Board of Equalization, a taxing body. The IRS said it needed the summons because the state's Proposition 58 and Proposition 193 complicate the data the IRS maintains about real-estate transfers. This week, the judge said the IRS couldn't serve the summons because it hadn't shown it couldn't get the data otherwise.

The IRS declined to comment.

A court document with the IRS filing described efforts by Josephine Bonaffini, the coordinator of an IRS state and federal gift-and-estate tax program, to find people who haven't filed Form 709 to report U.S. gift and generation-skipping transfer taxes to the IRS.

The document, dated Dec. 21, said 323 taxpayers in the previous two years had been examined for failing to report possible gifts. Another 217 were being examined and 250 more were being considered for review. So far, Ms. Bonaffini said in the document, 97 had failed to report gifts on Form 709. Twelve cases resulted in taxes or penalties because a gift put the donor over the $1 million lifetime gift credit that applied at the time.

States that have handed over information on gift-like transactions are Connecticut, Florida, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin, according to the document. Ms. Bonaffini examined a sampling of data from these states and it showed "an extremely high failure-to-report rate," the document said.

A chart in the document indicated noncompliance rates of 60% in Connecticut, 90% in Florida, 60% Nebraska, 100% in Ohio, 90% in Virginia, 80% in Washington, and 50% in Wisconsin.

Ms. Kaufman said taxpayers need to be aware that there is no special exception to the rules when making a transfer to a family member. If the property is valued at more than $13,000, a gift-tax return must be filed. Even if the transfer falls within a lifetime exemption amount—currently $5 million—it must be reported.

Write to Arden Dale at [email protected]

LINK

_Gift Taxes:  FAQ

What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.
 
What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.
 
Gifts that are not more than the annual exclusion for the calendar year.
Tuition or medical expenses you pay for someone (the educational and medical exclusions).
Gifts to your spouse.
Gifts to a political organization for its use.
In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.
 
May I deduct gifts on my income tax return?
Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). If you are not sure whether the gift tax or the estate tax applies to your situation, refer to Publication 950, Introduction to Estate and Gift Taxes.
 
How many annual exclusions are available?
The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, and $13,000 on or after January 1, 2009, the annual exclusion applies to each gift.
 
What if my spouse and I want to give away property that we own together?
You are each entitled to the annual exclusion amount on the gift. Together, you can give $22,000 to each donee (2002-2005) or $24,000 (2006-2008), $26,000 (effective on or after January 1, 2009).
 
What other information do I need to include with the return?
Refer to Form 709 (PDF), 709 Instructions and Publication 950. Among other items listed:
 
Copies of appraisals.
Copies of relevant documents regarding the transfer.
Documentation of any unusual items shown on the return (partially-gifted assets, other items relevant to the transfer(s)).
 
What is "Fair Market Value?"
Fair Market Value is defined as: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." Regulation §20.2031-1.
 
Who should I hire to represent me and prepare and file the return?
The Internal Revenue Service cannot make recommendations about specific individuals, but there are several factors to consider:
 
How complex is the transfer?
How large is the transfer?
Do I need an attorney, CPA, Enrolled Agent (EA) or other professional(s)?
For most simple, small transfers (less than the annual exclusion amount) you may not need the services of a professional.
 
However, if the transfer is large or complicated or both, then these actions should be considered; It is a good idea to discuss the matter with several attorneys and CPAs or EAs. Ask about how much experience they have had and ask for referrals. This process should be similar to locating a good physician. Locate other individuals that have had similar experiences and ask for recommendations. Finally, after the individual(s) are employed and begin to work on transfer matters, make sure the lines of communication remain open so that there are no surprises.
 
Finally, people who make gifts as a part of their overall estate and financial plan often engage the services of both attorneys and CPAs, EAs and other professionals. The attorney usually handles wills, trusts and transfer documents that are involved and reviews the impact of documents on the gift tax return and overall plan. The CPA or EA often handles the actual return preparation and some representation of the donor in matters with the IRS. However, some attorneys handle all of the work. CPAs may also handle most of the work, but cannot take care of wills, trusts, deeds and other matters where a law license is required. In addition, other professionals (such as appraisers, surveyors, financial advisors and others) may need to be engaged during this time.
 
Do I have to talk to the IRS during an examination?
You do not have to be present during an examination unless IRS representatives need to ask specific questions. Although you may represent yourself during an examination, most donors prefer that the professional(s) they have employed handle this phase of the examination. You may delegate authority for this by executing Form 2848 "Power of Attorney."
 
What if I disagree with the examination proposals?
You have many rights and avenues of appeal if you disagree with any proposals made by the IRS.  See Publications 1 and 5 (PDF) for an explanation of these options.
 
What if I sell property that has been given to me?
The general rule is that your basis in the property is the same as the basis of the donor. For example, if you were given stock that the donor had purchased for $10 per share (and that was his/her basis), and you later sold it for $100 per share, you would pay income tax on a gain of $90 per share. (Note: The rules are different for property acquired from an estate). [ Link to Estate Tax Q&A ]
 
Most information for this page came from the Internal Revenue Code: Chapter 12--Gift Tax (generally Internal Revenue Code §2500 and following, related regulations and other sources)

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html

_ IRS: Gifting (Gift Taxes) FAQ

IRS: Gift Taxes
 
Gift Tax
The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
 
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

Gift Taxes

LINK

How to Gift a Vacation Home
SmartMoney
THE TAX BLOG // MAY 12, 2011, 9:27 AM
By Arden Dale
 
Lower real estate prices and higher gift tax limits are making this the perfect time for some wealthy individuals to gift vacation homes. An individual can give up to $5 million during his or her lifetime without paying a gift tax, and for couples that threshold is $10 million. Before, the limit was $3.5 million per person.

The higher limit only applies until 2013, and clients aren’t waiting, says Jay D. Waxenberg, chairman of the personal planning department at law firm Proskauer in New York. “We don’t know what’s going to happen,” he says.
 
Another consideration is the low price of real estate. When a cottage on the coast of Maine or a cabin on a lake in northern Wisconsin is worth less, the potential tax impact is smaller.
 
But some things need to be weighed carefully before making a gift of a vacation place, tax advisers say. Once ownership is transferred, parents or grandparents lose the legal right to decide who gets to use the place and when, whether it can be rented out and who is in charge of upkeep.
 
To retain some control or for tax purposes, owners typically use a trust. One health-care executive, for example, plans to pass a $4 million Jersey shore house in two trusts to his children, who are in their 20s. One trust will be in the man’s name, the other in his wife’s.
 
The trusts, a popular kind known as a Qualified Personal Residence Trust, or QPRT (pronounced “KYOO-pert”), transfer ownership over time and get the property out of the grantor’s estate for estate tax purposes. The couple still has to decide how long to make the trusts last. They may set a 20-year term for the man, who is in his late 50s, and a 25-year term for the wife, who is a bit younger. If they die too soon, the property goes back into their estate, and heirs owe tax on it.
 
A Massachusetts couple in their 60s, retired from the real estate business they owned, are using a different kind of trust to give away a place on Cape Cod to their three children, who range in age from 20 to 30.
 
The two will sign a deed to make the trust the new owner of the place outright. That way, they will no longer own an interest in it, as they would had they used a QPRT, according to Perry Ganz, a partner at Boston law firm Tarlow Breed Hart & Rodgers, who is working with them. They will still use the place sometimes, but pay rent to the trust when they do.
 
The couple is also doing what many people who give away a home to kids like to do: making another gift to the trust to pay for property taxes, insurance and maintenance on the place. That can help prevent squabbling among siblings later on.
 
Readers, are you thinking about gifting real estate to your children? If so, how?
 
SOURCE