AboutHarvey Mechanic Expertise US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation.
To search my previous answers you can do a Google search: site:allexperts.com/q/nonprofit [with your other search terms appended].
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Education/Credentials B.S. Columbia University in New York City, 1970
J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude
I had no idea where to direct this question, so please feel free to redirect me if you are not the correct person to ask.
My fiance's son was severely injured in a car accident last week and he is in a coma.
1. How do I go about setting up a donation fund to help with the medical costs? Is it as simple as going to a bank and setting up a bank account?
2. My fiance's ex-wife is the mother of the boy in the coma. I'm afraid that problems may arise between the two families on how the donation funds are used. Is there any way to involve a trustworthy third party to administer/distribute the funds to the hospital and also prevent any withdrawals?
3. Is it true that donations made to individuals or an individual's family are not tax deductible?
4. Are there any other financial or legal implications I should be aware of?
Thank you so much for your help. I appreciate it.
Sincerely,
NDH
Answer 1. You may set up an account but As to charitable deductions:
See IRS Publication 526 "Charitable Donations"
www.irs.gov/pub/irs-pdf/p526.pdf
on page 6 where the IRS lists as not deductible "Contributions to
individuals who are needy or worthy. This includes contributions
to a qualified organization if the giver indicates that the
contribution is for a specific person."
Please note that most states highly regulate solicitations for charitable purposes. The site
www.nasconet.org/agencies
has a list of the state offices that regulate charitable
organizations and charitable solicitations.
2. Certainly a trust may be established with a third party as trustee.
3. Correct. See #1 above.
4. The IRS may inquire as to the funds going into the account but those are not income items (gifts without expectation of anything in return). The Internal Revenue Code at section 102(a) provides that
generally gifts are not income. As long as the recipient is not a
an employee or board member or related to an employee or board
member of the donor then the gift is not taxable to the
recipient. Section 102(a) has "Gross income does not include the
value of property acquired by gift..." http://bit.ly/QEZhX
You are welcome.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
