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Wed Apr 13, 2016, 09:30 PM

Tax Returns - The Devil is in the details

Interesting item in the details for HRC 2014 Tax return is $3,22,700 to charities... ( of which $3,000,000 was to Clinton foundation).. Now it is also interesting the foundation refiled its Form 990 tax returns for 2010, 2011, 2012 and 2013, while the Clinton Health Access Initiative refiled its returns for 2012 and 2013 after Reuters discovered errors in the forms. The omissions were related to foreign government revenue during the period when Hillary ran the State Department. The charities' received millions of dollars from foreign governments creates conflicts of interests for a would-be U.S. president. It should also be noted that the charities' admitted failure to comply with an ethics agreement Clinton signed with Barack Obama's incoming presidential administration in 2008 in order for her to become secretary of state.. (See "The Clinton Foundation" below)

Now, for those that are not aware of the how and why of private foundations I have added a good summary following the Clinton foundation summary:

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The Clinton Foundation
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Now the Capital Research Center - America's Investigative Think Tank published an article on "The Clinton Foundation: A cauldron of conflicts and cronyism"


https://capitalresearch.org/2015/05/the-clinton-foundation-a-cauldron-of-conflicts-and-cronyism/

Summary: The former first family’s philanthropy has always been a vehicle to promote the careers of the Clintons. It does some good things that help people but in recent years it has functioned more like an unofficial campaign headquarters for Hillary Clinton’s 2016 presidential bid. And if there is one thing the Clintons are good at, it’s getting paid. The Clintons said the charity would not accept donations from foreign governments while Mrs. Clinton served as Secretary of State. They must have been crossing their fingers behind their backs because it was recently revealed that the Clinton Foundation accepted millions of dollars from foreign governments during Mrs. Clinton’s tenure at the State Department. Making matters worse, Hillary Clinton’s cavalier approach to U.S. national security has also spilled over into her family’s foundation – and a new book called “the most anticipated and feared book of a presidential cycle still in its infancy” is to be published this month. The Clinton Foundation may soon dominate news cycles, but not the way the Clintons wanted.

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Private Family Foundations
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Private Family Foundations

In recent years, several private foundations have gained prominence in the media, and raised public awareness of their causes. Foundations, including the Bill and Melinda Gates, are often created with one philanthropic goal in mind. However, as the grantors often realize, establishing your own foundation can often make smart money sense, as well.

Plus, your last name does not have to be Rockefeller or Getty to start your own.



The Role of the Foundation

A Private Family Foundation (PFF) is a separate entity, privately funded by you. It is created with the specific purpose of contributing to various charitable causes.

As a distinct, legal entity, The Private Family Foundation:

1. Contributes to a charitable cause and takes a tax deduction, while relinquishing personal control over your gift.

2. Minimizes your estate tax liability.

3. Avoids capital gains tax on the sale of appreciated property contributed to the charity of your choice.

4. Provides continuing employment and activity for your family members.

5. Identifies and preserves your family name for years to come.




Create and Control Your PFF

Any Private Family Foundation must be created with a charitable "intent." The Foundation is managed by a trustee or executive director that oversees the Foundation's investments and distributes the Foundation's assets.

You can even appoint yourself as the trustee of your own Foundation. This way, you maintain control over the assets contained in the Foundation. Instead of making a one-time gift to a public charity (and losing control of that gift), you can monitor your favorite charities. If one non-profit changes its focus, or if a more meaningful cause comes along, you can reallocate your Foundation's support.




Special Tax Advantages

Private Family Foundations have special tax advantages, because they are considered "charitable organizations" themselves. Because of this classification, any earnings on Foundation assets are tax-exempt, and can be distribute to the charities you choose.

If established properly, a private family foundation can often avoid capital gains taxes on highly-appreciated assets (see below). In addition, interest and investment earnings that are not slapped with an income tax can instead be used to help the charities or causes you support.




Immediate Tax Benefits for You

If you have highly-appreciated assets that you're holding to avoid steep capital gains taxes, a Private Family Foundation could help. Any appreciated assets that you transfer to a Private Family Foundation can be sold by the Foundation with no capital gains taxes. This is because of the Foundation's charitable status.

Second, you can get an immediate tax deduction for any money or property to grant to the Foundation. This deduction can equal up to 30% of your adjusted gross income (20% for appreciated property). Any income tax deduction not used in your contribution year may be carried forward over the next five years.

The valuation of these deductions depends on a number of things, including original cost and the type of property being transferred. (For more information on valuation, please request the PFF Special Report.)




Estate Tax Benefits

Every dollar that you contribute to your Private Family Foundation means one less dollar that is included in your estate. Gifts that are regularly made to charities can instead be used to fund your PFF. And if you are in a higher tax bracket, that could ultimately save up to 46% in estate taxes.

Best of all, you can make such contributions to a Private Family Foundation without affecting the $12,000 annual gift tax exclusion or the current $1 million Gift Tax Credit .




Required Distributions to Charities

Private Family Foundations have certain laws they must abide by, because they are a legal entity. For instance, by law, a Private Family Foundation must distribute at least five percent (5%) of its assets each year to public charities.

Let's suppose you leave $2,000,000 to your Private Family Foundation. The IRS says you must distribute at least $100,000 (or 5%) to recognized charities in order for the Foundation to qualify for its special tax advantages. Of course, you can select a higher payout if you choose. But five percent is the absolute minimum.

The annual payout is established when you first sit down with a qualified estate attorney who has experience working with large estates. And the difference between what the assets earn (e.g. 6% per year) and the mandatory payout can be put back into the Foundation.




Employment for the Family

You may arrange for your heirs and descendants to receive salaries as "employees" of your Foundation. Simply name family members as replacement trustees to succeed you after death or resignation.

Many Foundations pay their directors using the difference between their required distributions and their annual income. If your Foundation is earning 10% annually on its assets, but only paying 5% annually to charities, the difference can be distribute for legitimate expenses, including salaries for the directors of the Foundation.




Ensuring Kids Don't Lose Out

While charities will definitely benefit from your Foundation, your children are deprived of the donated assets, after estate taxes are accounted for. To remedy this situation, some individuals also choose to establish a generation-skipping dynasty trust (like The Legacy Trust) to avoid estate taxes for up to three generations.

The Legacy Trust, which is an advanced type of dynasty trust, also acts as a shield for assets (subject to variations in state law). When properly drafted and implemented, the Legacy Trust can also help place assets outside your estate, outside the reach of creditors, judgments, malpractice and divorce.

The Legacy Trust can also provide a substantial benefit for your heirs, particularly through the use of cash-rich life insurance. After funding The Legacy Trust with annual gifts, it can purchase insurance payable to your heirs (as beneficiaries of The Legacy Trust). The children would then receive a lump-sum when you pass away, or you could have The Legacy Trust support grandchildren (or even great-grandchildren). All of these benefits are usually 100% estate tax- and income tax-free if structured properly.




Foundations and Charitable Trusts

Private Family Foundations can also be combined with Charitable Remainder and Charitable Lead Trusts. By doing so, you may able to draw a significant income for your lifetimes and earn significant tax savings, while still maintaining a large degree of control of your assets.

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Reply Tax Returns - The Devil is in the details (Original post)
jimmy_crack_corn Apr 2016 OP
DanTex Apr 2016 #1
jimmy_crack_corn Apr 2016 #2
Stallion Apr 2016 #3
jimmy_crack_corn Apr 2016 #4
Stallion Apr 2016 #6
jimmy_crack_corn Apr 2016 #7
Skwmom Apr 2016 #5

Response to jimmy_crack_corn (Original post)

Wed Apr 13, 2016, 09:32 PM

1. Yet another link to a right-wing source...

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Response to jimmy_crack_corn (Original post)

Wed Apr 13, 2016, 09:51 PM

3. One More Important Fact-a Foundation is Owned by the Public at Large Not by Shareholders

in other words money donated to a Foundation is owned by nobody AND everybody. The Clintons can't gift such assets or transfer such funds through their estate nor can they revoke the Foundation.

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Response to Stallion (Reply #3)

Wed Apr 13, 2016, 10:55 PM

4. It a estate planning tool avaliable for the wealthy

Most of use will never accumulate enough wealth to set up a foundation but it is a great way the rich and famous set up a family dynasty

Immediate Tax Benefits for You... you can get an immediate tax deduction for any money or property to grant to the Foundation. This deduction can equal up to 30% of your adjusted gross income (20% for appreciated property). Any income tax deduction not used in your contribution year may be carried forward over the next five years.

Estate Tax Benefits......Every dollar that you contribute to your Private Family Foundation means one less dollar that is included in your estate. Gifts that are regularly made to charities can instead be used to fund your PFF. And if you are in a higher tax bracket, that could ultimately save up to 46% in estate taxes. Best of all, you can make such contributions to a Private Family Foundation without affecting the $12,000 annual gift tax exclusion or the current $1 million Gift Tax Credit .

Required Distributions to Charities .., by law, a Private Family Foundation must distribute at least five percent (5%) of its assets each year to public charities. Let's suppose you leave $2,000,000 to your Private Family Foundation. The IRS says you must distribute at least $100,000 (or 5%) to recognized charities in order for the Foundation to qualify for its special tax advantages. And the difference between what the assets earn (e.g. 6% per year) and the mandatory payout can be put back into the Foundation.

Employment for the Family ...You may arrange for your heirs and descendants to receive salaries as "employees" of your Foundation. Simply name family members as replacement trustees to succeed you after death or resignation. Many Foundations pay their directors using the difference between their required distributions and their annual income. If your Foundation is earning 10% annually on its assets, but only paying 5% annually to charities, the difference can be distribute for legitimate expenses, including salaries for the directors of the Foundation. ...

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Response to jimmy_crack_corn (Reply #4)

Wed Apr 13, 2016, 11:09 PM

6. Yes And Every Former President Has One

Last edited Thu Apr 14, 2016, 12:44 AM - Edit history (1)

they provide great intellectual, educational, economic and charitable contributions to every community they are in and some like the Clinton's provide international charitable relief across the world. So what other windmill you want to attack. I've been to about 4 Presidential Libraries/Foundations from both parties and George W. Bush's Foundation was just added to my alma mater SMU with over $450,000,000.00 in private donations. Despite my loathing of the Man I can't say that the Foundation doesn't serve an important function to the community or historically significant purpose

Further it would only be an Estate planning tool to the extent the Clinton's gifted or made testamentary bequests of assets to the Foundation FROM THEIR OWN ASSETS. The United States encourages all individuals to make charitable gifts through the Income Tax and Estate Tax Codes-the Clinton's are in no way unique in that situation. They certainly can't pass Foundation assets to their heirs or legatees through Foundation assets because the Foundation assets belong to the Public and there are no shareholders of a Foundation

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Response to Stallion (Reply #6)

Thu Apr 14, 2016, 06:18 AM

7. Every Former President

At any rate ... I highly doubt the other Presidential Foundations behaved more presidential and were not called a "slush fund’ by Charity Watchdog

http://nypost.com/2015/04/26/charity-watchdog-clinton-foundation-a-slush-fund/

"The Clinton Foundation’s finances are so messy that the nation’s most influential charity watchdog put it on its “watch list” of problematic nonprofits last month.

The Clinton family’s mega-charity took in more than $140 million in grants and pledges in 2013 but spent just $9 million on direct aid.
The group spent the bulk of its windfall on administration, travel, and salaries and bonuses, with the fattest payouts going to family friends.
On its 2013 tax forms, the most recent available, the foundation claimed it spent $30 million on payroll and employee benefits; $8.7 million in rent and office expenses; $9.2 million on “conferences, conventions and meetings”; $8 million on fundraising; and nearly $8.5 million on travel. None of the Clintons is on the payroll, but they do enjoy first-class flights paid for by the foundation.
In all, the group reported $84.6 million in “functional expenses” on its 2013 tax return and had more than $64 million left over — money the organization has said represents pledges rather than actual cash on hand.
Some of the tens of millions in administrative costs finance more than 2,000 employees, including aid workers and health professionals around the world.
But that’s still far below the 75 percent rate of spending that nonprofit experts say a good charity should spend on its mission.
Charity Navigator, which rates nonprofits, recently refused to rate the Clinton Foundation because its “atypical business model . . . doesn’t meet our criteria.”
Charity Navigator put the foundation on its “watch list,” which warns potential donors about investing in problematic charities. The 23 charities on the list include the Rev. Al Sharpton’s troubled National Action Network, which is cited for failing to pay payroll taxes for several years.
Other nonprofit experts are asking hard questions about the Clinton Foundation’s tax filings in the wake of recent reports that the Clintons traded influence for donations.
“It seems like the Clinton Foundation operates as a slush fund for the Clintons,” said Bill Allison, a senior fellow at the Sunlight Foundation, a government watchdog group where progressive Democrat and Fordham Law professor Zephyr Teachout was once an organizing director.
In July 2013, Eric Braverman, a friend of Chelsea Clinton from when they both worked at McKinsey & Co., took over as CEO of the Clinton Foundation. He took home nearly $275,000 in salary, benefits and a housing allowance from the nonprofit for just five months’ work in 2013, tax filings show. Less than a year later, his salary increased to $395,000, according to a report in Politico.
Braverman abruptly left the foundation earlier this year, after a falling-out with the old Clinton guard over reforms he wanted to impose at the charity, Politico reported. Last month, Donna Shalala, a former secretary of health and human services under President Clinton, was hired to replace Braverman.
Nine other executives received salaries over $100,000 in 2013, tax filings show.
The nonprofit came under fire last week following reports that Hillary Clinton, while she was secretary of state, signed off on a deal that allowed a Russian government enterprise to control one-fifth of all uranium producing capacity in the United States. Rosatom, the Russian company, acquired a Canadian firm controlled by Frank Giustra, a friend of Bill Clinton’s and member of the foundation board, who has pledged over $130 million to the Clinton family charity.
The group also failed to disclose millions of dollars it received in foreign donations from 2010 to 2012 and is hurriedly refiling five years’ worth of tax returns after reporters raised questions about the discrepancies in its filings last week."



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Response to jimmy_crack_corn (Original post)

Wed Apr 13, 2016, 11:01 PM

5. I do not understand why President Obama isn't upset with the violation of the ethics agreement.


He gave her a great job, had her agree to the terms, and then she went ahead and did what she wanted. Seriously? IMO, this will taint his legacy.

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