mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., Ill River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data is Available:
ISBN 9781119756002 (cloth)
ISBN 9781119756040 (ePDF)
ISBN 9781119756026 (epub)
Cover Design: Wiley
Cover Image: ©iStockphoto.com/Trifonov_Evgeniy
The sixth edition of this book is dedicated to the lawyers and other professionals who engage in the important work of counseling and otherwise assisting donors in their charitable giving endeavors.
Preface
Although this sounds like a horrendous conceit, I marvel at this book. More accurately, I marvel at the expanse of this book. The very title suggests a subject that ought to be summarized in a pamphlet: The Tax Law of Charitable Giving. The principal reason for my amazement: How can something as seemingly simple and innocent as charitable giving generate so much law? It is, I suppose, a hallmark of our society; matters of law are quite complicated in the United States, and this includes the matter of the tax law consequences of transferring money and property to charitable organizations.
There is another reason for my wonder, one that is personal. By the early 1990s, this book had been on my mind for a considerable time. It had been written, in fits and starts, on many occasions over the years, with the manuscript pages ending up accumulating in this storage box and that file. It took some gentle prodding by the wonderful people at John Wiley & Sons—specifically, for the initiation of this project, Jeffrey Brown (long since retired) and Marla Bobowick (now a consultant in the charitable sector)—to get me going on completion of the book. The first edition appeared in 1993. Martha Cooley skillfully continued in the fashion of her predecessors; the second edition arrived in 1997. Susan McDermott provided the impetus for the third and fourth editions (2005, 2010) of the book. Lia Ottaviano oversaw production of the fifth edition (2014). Brian Neill has had the good fortune to nurture this sixth edition to existence (although I am not certain he sees the experience this way).
It is not that I did not want to write this book; that is certainly not the case. In fact, I long dreamed of—it seems rather immodest to say it—a trilogy. This idea reflects what is now more than 50 years of law practice entirely in the realm of nonprofit organizations. I see the law uniquely affecting these organizations as falling into three general fields: the law of tax-exempt organizations, the law of fundraising, and the law of charitable giving.
By the time the pressure was mounting to write a book on charitable giving, the books on tax-exempt organizations law and fundraising law had been published (by Wiley, of course). Certainly, the time had come to begin (actually, rebegin) the writing of the third book. But I found my writing time diverted to other subjects (such as other books, book supplements, and my monthly newsletter); postponement of the charitable giving book had become the order of my days.
I have been writing books, published by Wiley, for more than 40 years. (The first book, the third edition of The Law of Tax-Exempt Organizations, was published in 1979. The predecessor to The Law of Fundraising was published in 1980.) These and other Wiley books I have been involved with entail the writing of annual supplements. As the 1980s unfolded, I discovered something unusual: I enjoy writing supplements. (There is something perversely challenging about simultaneously correcting prior mistakes while capturing and integrating subsequent developments.)
Thus, while writing supplements to the tax-exempt organizations and fundraising books, I found myself wanting to write supplements for a book on the law of charitable giving. This was (and is) because of the immense swirl of developments in the law taking place in all three arenas. The problem, however, was obvious: One cannot supplement a book that does not exist—or exists only in the realm of the author's mind.
So I set about to finish what became the first edition of this book. This is not to imply that I wrote it just so I could justify the writing of supplements for it (although a case can be made that that was a partial reason). I wrote the book because I was impressed with the volume of law being generated in the field; I wanted readers to have a book that explains the basics and new developments concerning the law of charitable giving in a comprehensive manner.
The law on the subject of charitable giving has become intricate; there is no letup in sight. Those who need to keep up with the law in this area deserve a single place to go to find both the fundamentals and the recent developments. With the trilogy now firmly in place (all three books being annually supplemented), the federal tax law of charitable giving can be placed in its appropriate context. The book reflects the parade of much legislation: not only the magnificent Tax Reform Act of 1969 (in place, of course when the book was first written) but laws enacted over the years of the book's existence, from the Omnibus Budget Reconciliation Act of 1993 to the Tax Cuts and Jobs Act (2017) and beyond.
The Treasury Department and the IRS are also quite busy in the charitable giving field, promulgating much in the way of regulations, notices, announcements, forms, private letter rulings, and technical advice memoranda. Issues and subjects in the realm of the tax law of charitable giving that the IRS has recently addressed include gifts where the donor retains the ability to manage the gift property, regulations concerning the charitable remainder trust characterization and ordering rules, a controversial (and withdrawn) proposal concerning the impact of spousal elective share laws on the qualification of charitable remainder trusts, regulations concerning the taxation of charitable remainder trusts with unrelated taxable income, record keeping and substantiation rules imposed in connection with cash and noncash contributions, proposed regulations concerning new rules pertaining to qualified appraisals and appraisers, guidance issued by the IRS as to the federal tax consequences of division of
