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Tax Deductible Contributions to Single Member Limited Liability Companies

August 14, 2019

KSM Charitable Foundation Services

In Notice 2012-52, the Internal Revenue Service (IRS) clarifies that donors who make contributions to a domestic single member limited liability company (LLC) that is wholly owned by a charity will be treated as made to the charity for income tax deduction purposes. This notice is helpful where, for example, a donor wants to give real estate to the charity. For liability reasons, the charity may not want to take title to the property directly. The charity can now use a single member LLC to hold this property. The single member LLC does not file its own tax return, and its income and expenses are reported on the tax return for the charity. Prior to this notice, it was not clear that a donor would be entitled to a charitable income tax deduction under these circumstances. For more information, please contact us.

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