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685327592 t1_iv1rthh wrote

Reply to comment by 40for60 in [OC] Forbes 2022's Most Philanthropic US Billionaires by row64software

No. If you donate to a charity like the Red Cross then they now control that money. However if you donate to your own "charity" then you still control all that money and can now spend it tax free.

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40for60 t1_iv1sbht wrote

So you can buy a house and a boat for yourself with the money "tax free"?

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685327592 t1_iv1t4lw wrote

That certainly has happened before, but most people are a little more subtle.

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40for60 t1_iv1tk1g wrote

explain, I'm really curious how in-tune you really are with this, are you a CPA or an Attorney who sets up and manages charitable trusts and foundations? You seem to be very smart. What % of dollars going into foundations are being used for self dealing?

https://www.irs.gov/charities-non-profits/private-foundations/acts-of-self-dealing-by-private-foundation

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_BreakingGood_ t1_iv3z185 wrote

Much of it isn't necessarily to buy themselves a yacht or something. It's setting up a foundation, putting your family members in extremely high paying executive positions, then donating to it. Your family members get paid their huge salary to do nothing, and it is beneficial from a tax perspective compared to a gift.

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40for60 t1_iv5tcax wrote

The family members still need to pay income tax on that so all that is happening is avoiding the estate taxes which you can easily do without setting up a foundation, you don't understand tax codes. In your child like thirst for finding fault you dismiss the good that is done because you need to find villains around every corner. I'm curious what do you do to help the world? Can you list your accomplishments? Or are you just a whiner and complainer? A loser critic?

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_BreakingGood_ t1_iv61i3p wrote

Yes I said "beneficial from a tax situation" not "tax free"

Learn English mate

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40for60 t1_iv61sla wrote

But it isn't and would be a big expensive hassle that could put the family members in legal jeopardy for no good reason if the only goal was to funnel money to heirs. Also I'm not your mate, I want nothing to do with you.

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_BreakingGood_ t1_iv6k1zv wrote

Nope it's pretty well practiced as an approach, nothing illegal about it. Your child or friend just happens to be an executive at the nonprofit you founded. How is that illegal?

Tax benefits come from being able to donate to the non-profit to pay their salary, rather than giving them a flat gift, which has huge taxes after around 11 million.

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40for60 t1_iv6lu0f wrote

Nothing illegal about doing legal things but there are rules and self dealing is a issue.

If the goal is to get your kids money without the expectation of them doing anything for it there are better ways. Why go through the hassle of setting up a fraudulent foundation? What kind of attorney's and accountants will participate in an obvious illegal venture? All you are doing is generalizing so we might as well say all poor people are criminals too because some poor people steal things. If a person intends to create a foundation and donate money to it with a stipulation that the children are on the board or payroll and they do nothing for it at some point it will be a issue if its abused. My guess is that this problem is much smaller then what you want to believe and most foundations act in good faith. I personal have been involved in many and have yet to witness this kind of bullshit. Do foundations sometimes get top heavy, yes, do they make mistakes, yes, but self dealing as a practice, I doubt its that big of a issue.

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