There is still time to open a private foundation in 2016 for the philanthropic and tax benefits.
FAIRFIELD, CT – December 15, 2016 – With the clock ticking down on 2016 and uncertainty surrounding the future of the charitable income tax deduction under the Trump administration, inquiries regarding private foundations from donors and their advisors have increased over previous years, according to Foundation Source, a company that establishes and provides comprehensive management and advisory services for private foundations.
“Existing foundations, attorneys, tax advisors and high-net-worth individuals are all concerned about the potential impact of President-elect Trump’s proposed tax reforms on their ability to maximize charitable income tax deductions,” says Foundation Source CEO Susan Friedlander Calzone. “Faced with that uncertainty, many people who had been planning to step up their philanthropy in the next few years are accelerating those plans. We’ve been fielding a high volume of calls from donors and their advisors who are inclined to act before any possible policy changes go into effect.”
Here are a few elements of the proposed tax changes that could account for the increased interest in private foundations ahead of the New Year:
- President-elect Trump’s plan calls for capping itemized income tax deductions, including charitable deductions, at $100,000 for single taxpayers and $200,000 for married taxpayers filing jointly. Currently, a donor may be eligible to receive an income tax deduction for any amount he or she contributes to a private foundation up to 30% of adjusted gross income (AGI);
- The plan also calls for lowering the top federal income tax rate, making 2016 potentially the most attractive time to take deductions; and
- The possible elimination of the ability to make tax-free gifts to a private foundation out of an estate, causing individuals to reassess their estate plans and consider giving more during their lifetimes.
Moreover, a foundation opened before the end of the year will have until December 31, 2017 to make its required distributions, making it especially appealing for donors to take action now.
“While some may hear ‘private foundation’ and assume you need millions of dollars to get started, that is simply not the case,” says Chief Distribution Officer Joseph Fuschillo. “With Foundation Source, you can be up and running in three business days with as little as $250,000 in initial funding. So while the 2016 deadline looms, it is certainly not too late to start fulfilling your sense of purpose.”
About Foundation Source (www.foundationsource.com)
Foundation Source is the nation’s largest provider of comprehensive support services for private foundations. The company’s administrative services, online foundation management tools, and philanthropic advisory services provide a complete outsourced solution, including the creation of new foundations. Our clients supply the vision; we provide everything else. Now in our second decade, Foundation Source provides its services to more than 1,300 family, corporate, and professionally staffed foundations, of all sizes, nationwide. We work in partnership with wealth management firms, law firms, and accounting firms, as well as directly with individuals and families. Foundation Source is headquartered in Fairfield, Connecticut.