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TAX ADVANTAGES |
Tax Advantages of a Community Foundation
Many people
create a Fund within the Community Foundation instead of creating a
private or family foundation. There are lots of reasons why: - You may take the maximum tax
deduction allowed by law at the time the fund is established or carry
the deduction forward over the next five years if necessary.
- You gain a higher deduction for cash: up to 50% of your adjusted gross income (AGI) compared to 30% for a private foundation.
- You gain a higher deduction for appreciated securities: up to 30% of AGI compared to 20% for a private foundation.
- You
gain a fair market value deduction for other appreciated property (e.g.
real estate) compared to only the cost basis for a private foundation.
- You pay no start-up costs.
- Annual costs are minimal. The Board of Directors is committed to keeping costs as low as possible.
- There is no minimum payout compared to the 5% distribution requirement for a private or family foundation.
- You pay no excise tax compared to the 2% excise tax for a private or family foundation.
- You avoid the expense of costly tax returns and other IRS filing requirements that apply to private and family foundations.
- You avoid the complicated self-dealing and conflict of interest regulations that are imposed on private and family foundations.
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