Thinking About Starting a Private Foundation? Proceed With Extreme Caution
By Anthony Diosdi Promoters of private foundations make private foundations sound like the perfect tax planning option. Here is how one promoter describes private foundations-“Private Foundation or Family Foundation (PF) can let you control your legacy, reduce your income taxes and impact your values to future generations. Family foundations provide living donors with flexibility as to the trimming of gifts. For instance, a donor may in one year have particularly high income and wish to take full advantage of the income tax deduction for a cash gift to a foundation (individual taxpayers may deduct up to 30% of their adjusted gross income for cash gifts), without deciding in that same year on the final charitable recipients. In a subsequent lean year, the foundation will have available additional funds for giving…