The post Noncash Charitable Contributions: Understanding IRS Form 8283 first appeared on Hedgeman Law Firm.
]]>Form 8283 serves as a comprehensive report to the IRS, detailing the noncash charitable contributions made. It substantiates the value of the contributions you claim as deductions on your tax return, acting as a record of your philanthropy and a protective measure against potential tax authority scrutiny.
Individuals: Any individual taxpayer who has donated noncash items exceeding a total value of $500 is required to file Form 8283.
Partnerships and Corporations: The same threshold applies to partnerships and corporations. These entities must maintain accurate records of their noncash charitable contributions, ensuring the proper reporting of each partner’s share of the donation.
Noncash charitable contributions can vary widely, encompassing items such as:
Section A: For items with a claimed deduction of $5,000 or less per item or group of similar items. Most taxpayers report their contributions here, detailing the type of property donated and the recipient charity.
Section B: For items where the claimed deduction exceeds $5,000. Noncash charitable contributionsin this section require a qualified appraisal, subject to rigorous IRS appraisal standards.
A “qualified appraisal” is mandatory for all gifts of non-cash property valued over $5,000. This appraisal must be conducted by a “qualified appraiser,” adhering to specific standards outlined by the IRS. The appraisal serves as a foundational document, validating the claimed value of the donated property, and is essential for both the donor and the receiving organization. Failure to obtain a qualified appraisal or to attach the required appraisal summary to Form 8283 can result in the denial of the deduction, which is capped at 20% to 50% of the taxpayer’s adjusted gross income, and potential penalties.
An attorney can guide the valuation process, helping to avoid common pitfalls that might lead to an IRS audit. This includes ensuring the appraisal methods used are accepted practices and reflect the true value of the contributed property.
An attorney can offer strategic advice on maximizing tax benefits while maintaining compliance with both IRS regulations and corporate governance standards. This is especially pertinent for donations of inventory, equipment, or intellectual property, where the valuation and documentation requirements can be particularly stringent.
Filing Form 8283 with complete and accurate information, supported by solid documentation, demonstrates compliance and deters IRS scrutiny.
Charitable giving, while noble, requires a meticulous approach to ensure tax obligations are met. Your attorney can play a critical role in strategic planning for future charitable contributions. This includes advising on the timing of donations, selection of recipient organizations, and structuring of contributions to maximize tax benefits and align with the donor’s philanthropic goals.
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]]>The post Nonprofit Law Academy Registration first appeared on Hedgeman Law Firm.
]]>Click on the topics you want to attend and click the Zoom registration on the topic page.
The post Nonprofit Law Academy Registration first appeared on Hedgeman Law Firm.
]]>The post Small Businesses and the Corporate Transparency Act first appeared on Hedgeman Law Firm.
]]>The CTA, primarily an anti-money laundering law, aims to prevent illicit activities such as money laundering, terrorism financing, and tax fraud. It requires some businesses to disclose information about their beneficial owners to FinCEN. This move is designed to peel back the layers of anonymity often exploited by bad actors in corporations, LLCs, and similar entities.
Virtually every small business structured as a corporation or LLC must comply unless they fall under one of the exemption categories. These exemptions generally apply to entities already under substantial federal or state regulation, such as publicly traded companies, banks, and insurance companies. A notable exemption is for “large operating companies” meeting specific criteria in employee count, physical presence, and revenue.
Businesses must report details such as the legal name, trade name, address, jurisdiction of formation, and taxpayer identification number. For each beneficial owner and company applicant, the report must include their full legal name, date of birth, address, and an identifying number from a document like a passport or driver’s license.
Beneficial Owners: Individuals who, directly or indirectly, exercise substantial control over the company or own at least 25% of its ownership interests.
Company Applicants: Individuals who file the document creating the company or who are primarily responsible for directing or controlling the filing.
Filing Deadline: Companies created before January 1, 2024, must file their initial report by January 1, 2025. Companies created on or after January 1, 2024, must file a report within 90 days of receiving the public notice. Companies created on or after January 1, 2025, have 30 days to file a report.
Filing Process: Reports are filed electronically through FinCEN’s system, available on their website.
Small businesses should start preparing now. This involves determining if they are a reporting company, gathering the required information, and setting up a system to track and update this information.
For further guidance, businesses can access resources on FinCEN’s website or contact the Hedgeman Law Firm.
The Corporate Transparency Act represents a step towards greater transparency in the business world. While it introduces new compliance obligations for small businesses, understanding and preparing for these changes can ensure a smooth transition into this new regulatory landscape.
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]]>The post Navigating Residential Real Estate: Why You Need an Attorney by Your Side first appeared on Hedgeman Law Firm.
]]>Buying or selling a home is more than just a transaction; it’s a pivotal life event. While it’s tempting to handle a residential real estate transaction on your own, the complexities and legal nuances involved make having an attorney not just beneficial, but essential. That’s why you should engage the services of a real estate attorney who can safeguard your interests, ensure legal compliance, and provide peace of mind during one of the most significant financial decisions of your life.
While it’s possible to complete a residential real estate transaction without legal assistance in some states, the risks involved can be significant. An attorney not only provides legal expertise but also acts as a safeguard against potential legal pitfalls. In the complex world of real estate, having an attorney by your side is not just a luxury; it’s a necessity for a secure and successful transaction.
If you’re embarking on a residential real estate transaction, don’t go it alone. Contact Hedgeman Law Firm today to ensure your real estate journey is smooth, legally sound, and stress-free.
The post Navigating Residential Real Estate: Why You Need an Attorney by Your Side first appeared on Hedgeman Law Firm.
]]>The post New York Rules for Fundraising for an Individual first appeared on Hedgeman Law Firm.
]]>There are certain circumstances where one would need to file with the attorney general to fundraise for an individual. Next, there may be up to three secondary beneficiaries stated. For these beneficiaries to be official multiple requirements must be fulfilled. If secondary beneficiaries have not been correctly filed and the correct steps are taken the remaining funds may be allocated to an individual or organization that has the same or similar purpose as the original beneficiary. Lastly, there are many actions that are prohibited when fundraising for an
individual.
An individual does not have to file with the attorney general if the person requesting any contributions for the individual, specified by name at the time of solicitation, if all the contributions collected, without any deductions whatsoever, are paid to or for the benefit of the named beneficiary. NY Exec L § 172-A (2016). Prior to anyone starting solicitation, the principal person requesting contributions may file a form with the attorney general. The form format can be found in The New York State Senate under article 172-A. Id.
When fundraising for an individual and not an organization, an individual may list up to three secondary beneficiaries. Id. These secondary beneficiaries would step in, if circumstances would render it impossible or impracticable to use any of the money for the original beneficiary. The three designated secondary beneficiaries can either be individuals or organizations. Id. These beneficiaries would be considered ineffective until such form has been filled out and filed with the Attorney General. NY Exec L § 172-A (2016). All the individuals that are requesting contributions must have informed the person they are soliciting from of the filing of the three
secondary beneficiaries. Id.
In the instance that it becomes impossible or impractical for the primary beneficiary to use or collect the money, and there are no designated secondary beneficiaries, then specific protocol needs to be followed. Id. Then either the attorney general, the primary beneficiary or any individual that has requested a contribution may petition to the court that the remaining money shall be transferred to a charitable organization that has a similar purpose to those of what the contributions were collected for, under the circumstances next stated. Id. The petition must be on notice to the attorney general, the primary beneficiary (if living), any secondary beneficiaries, and the principal person who requested the contributions. Id. The “principal person requesting the contributions” is the person who is primarily responsible for soliciting funds to the relief of the specific individual. Id. The “principal person requesting the contributions” does not include any individual who solicits funds to then send it later to the principal person requesting the contributions. NY Exec L § 172-A (2016).
If within sixty days of the receipt the money collected for the relief of the individual is, paid to or for the benefit of the primary beneficiary without any deductions whatsoever then all the requirements stated in the above two paragraphs have been met and complied with. Id.
When applying for a fundraiser it is prohibited to make a false statement or to fail to disclose a fact on “an application for registration, registration statement, a claim of exemption, financial report or any other forms or documents required to be filed or filed pursuant to this article[.]”. NY Exec L § 172-D (2016). Individuals are prohibited from engaging in fraudulent or illegal acts, or using false representations when soliciting money or when registering/reporting disclosure under this provision. Id. In the instance stated above fraudulent is described as, being “misleading or deceptive” and is further explained in NY Exec L § 63, to prove fraud there is no
need to prove intent or injury. Id. It is also prohibited behavior to use false or misleading statements when advertising or promoting material in connection with solicitation. Id. Individuals are prohibited from applying contributions in a way that is not consistent with what was explained or advertised when soliciting them. Id.
Individuals are not allowed to enter into a contract/agreement that employs or engages “any professional fundraiser, fundraising counsel or professional solicitor” who needs to be registered in accordance with “this article unless such professional fundraiser, fundraising counsel or professional solicitor” has given a statement that is signed under the penalties of perjury, and that this statement is registered and in compliance with the filing requirements of the article. Id. There are further prohibitions that can be explored at New York State Senate under
article 172-D.
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]]>The post Hedgeman Law Firm Launches 2023-2024 Nonprofit Law Academy first appeared on Hedgeman Law Firm.
]]>The last few years have been challenging in more ways than one for tax-exempt entities and Religious
Corporations. Now, more than ever, tax-exempt organizations are being asked to do more with less. For
some, the donor base has dried up and corporate citizens have less capital to invest in nonprofit missions
and are looking to laser focus their efforts for the biggest impact. If your tax-exempt entity is considering
its options for a sustainable future, your leadership staff and board should attend the NLA.
Nonprofit Law Academy sessions are free but require registration. To sign up to receive Nonprofit Law Academy related emails and updates visit
www.hedgemanlaw.com and subscribe.
Nonprofit Law Academy 2023 topics will include: Sustaining Your Nonprofit Organization, Mergers, Consolidations and
Dissolutions (November 10, 2023).
The post Hedgeman Law Firm Launches 2023-2024 Nonprofit Law Academy first appeared on Hedgeman Law Firm.
]]>The post Lobby Law Compliance for Your Nonprofit Organization first appeared on Hedgeman Law Firm.
]]>Remember, adhering to lobby law compliance not only safeguards your organization’s legal standing but also reinforces your commitment to transparency and ethical advocacy.
If you have any questions or need further assistance regarding lobby law compliance or any other Government Relations matters, please don’t hesitate to reach out to our firm. We are here to ensure that your nonprofit’s advocacy initiatives are conducted smoothly, ethically, and within the boundaries of the law.
The post Lobby Law Compliance for Your Nonprofit Organization first appeared on Hedgeman Law Firm.
]]>The post A Guide to Commercial Real Estate Transactions first appeared on Hedgeman Law Firm.
]]>For aspiring commercial real estate investors, understanding and following these steps are essential for a smooth transaction:
This initial stage involves identifying potential investment opportunities amidst the vast array of commercial properties available. Thorough market analysis and the development of an investment thesis are crucial strategies to guide the search. Investors can focus on specific property types, like Class A buildings, or analyze promising geographical locations for commercial property investments.
Underwriting entails a comprehensive analysis of the selected property’s past and current data to project its future performance. Key activities in this stage include gathering financial documents like bank statements and invoices, conducting a pro forma analysis based on historical data to predict future expenses and income, and conducting market and submarket research. Negotiations with the seller or their representative regarding the property’s initial price are also part of this step. If the property successfully navigates this stage, a purchase agreement is drafted, and the buyer typically provides a good-faith deposit to a title and escrow company to confirm their commitment to the purchase.
During the due diligence period, a thorough inspection of the property is carried out to verify its condition and information, confirming its suitability for investment. The primary objective is to ensure that the property aligns with the claims made during the underwriting stage. This process involves hiring an appraiser to evaluate the property, engaging professional structural engineers to assess the building’s integrity, scrutinizing property documentation for accuracy, conducting interviews with the property manager to address any maintenance concerns, and physically inspecting plumbing and electrical systems. Satisfactory results from the due diligence phase pave the way for the final stage of the transaction.
The due diligence period is typically between 30 to 60 days, but this timeframe may vary depending on the buyer’s requirements. It’s essential to note that buyers can back out from a commercial real estate deal, but doing so without a valid reason may result in losing the good-faith deposit.
The closing phase is the culmination of the transaction process. While relatively short, it requires meticulous attention to detail. During closing, both parties sign all necessary documents, and funds are transferred from the buyer’s agent to the seller’s agent through the title and escrow company. Additionally, keys, access codes, and vital documents are exchanged to complete the transfer of ownership.
Understanding and diligently following the steps in a commercial real estate transaction are paramount to its success. Hiring a reputable real estate attorney like the Hedgeman Law Firm, can provide valuable support and guidance throughout the process.
The post A Guide to Commercial Real Estate Transactions first appeared on Hedgeman Law Firm.
]]>The post Understanding The Limitations of Nonprofit Political Activity first appeared on Hedgeman Law Firm.
]]>Nonprofit political activity refers to any activity that seeks to influence political candidates, parties or legislation. It can include lobbying, voter education and mobilization, issue advocacy and campaign intervention. It is important for nonprofit organizations to understand the limitations of political activity in order to maintain their tax-exempt status and avoid legal consequences.
The Internal Revenue Service (IRS) has strict rules and regulations for 501(c)(3) organizations regarding political activities. These organizations are prohibited from participating in any partisan political activity, endorsing or opposing candidates, and contributing to political campaigns. Failure to comply with these rules can result in the loss of tax-exempt status and penalties. From the IRS website, “Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”
Nonpartisan activities are permitted by 501(c)(3) organizations, which include voter education and mobilization, issue advocacy, and educational activities allowed by the IRS. It is important to note that any activities that favor one candidate or political party over another are considered partisan and are not allowed.
Voter education and mobilization are crucial activities for nonprofit organizations. Permissible voter education activities include nonpartisan voter registration drives, candidate forums, and publishing voter guides. However, limits on voter mobilization activities exist, and nonprofit organizations must ensure that their activities do not cross the line into partisan political activity.
Issue advocacy refers to activities that support or oppose a particular issue, such as healthcare or environmental policies. Nonprofits may advocate for or against a particular issue as long as that advocacy furthers its mission. Permissible issue advocacy activities include educating the public on policy issues, conducting research and analysis, and mobilizing support for or against specific policies However, nonprofit organizations must be careful not to engage in partisan activities that support or oppose particular candidates or political parties.
Lobbying refers to attempts to influence specific legislation. Permissible lobbying activities include providing information to lawmakers and advocating for specific policy positions. However, limits on lobbying activities exist, and nonprofit organizations must ensure that their lobbying activities do not exceed a certain threshold.
Campaign intervention refers to activities that support or oppose specific candidates. Examples of prohibited campaign intervention activities include making contributions to political campaigns, endorsing candidates, and conducting activities in support of or opposition to specific candidates. Nonprofit organizations must be careful to avoid any campaign intervention activities that could result in the loss of their tax-exempt status.
Real-life examples of nonprofits facing political activity limitations can provide valuable insight into the challenges of staying within legal boundaries. Lessons learned from these case studies include the importance of maintaining a clear separation between political and nonpolitical activities, staying within IRS guidelines, and avoiding any activities that could be interpreted as partisan political activity.
To stay within legal boundaries, nonprofit organizations should follow best practices for political activity, including staying nonpartisan, being transparent, monitoring compliance, and seeking legal guidance when necessary. It is important for organizations to maintain ongoing education and compliance monitoring to avoid any potential legal issues.
Nonprofit organizations play an important role in shaping public policy, but they must be aware of the limitations of political activity to avoid legal issues and penalties. By following best practices and staying within legal boundaries, nonprofit organizations can continue to advocate for important issues and maintain their tax-exempt status.
The post Understanding The Limitations of Nonprofit Political Activity first appeared on Hedgeman Law Firm.
]]>The post Nonprofit Laws in Virginia first appeared on Hedgeman Law Firm.
]]>When you file for incorporation you must include whether or not you will have members and you must identify how directors will be elected.
You must have at least 3 directors, not related to each other. When recruiting nonprofit board members, keep some things in mind to find the right candidates:
You exist to provide public benefit. Your board members should have deep knowledge and passion for your mission. When board members have a thorough understanding of your mission, they can make decisions that consider your community’s needs and help you achieve your goals.
Your goal is to create a board with a diverse background and complementary skills. Consider having a member with financial experience or legal expertise. If your nonprofit relates to something specific such as medical services, having a medical professional on your board can be a real asset.
Your board should participate in at least one annual meeting. You may need the board to meet quarterly, have a retreat, or participate in other activities. Your board members need to be able to attend these events, so be sure the people you choose understand the time commitment and can meet those expectations.
The board’s job is to ensure your mission and your community needs are met. Be sure to select individuals who do not have relationships with your management team or key employees.
The post Nonprofit Laws in Virginia first appeared on Hedgeman Law Firm.
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