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Private Foundation Formation

In a nutshell, a private foundation is a charitable organization that is intended to serve a good cause. These foundations make it easier to give to causes that their owners care about, and streamline the process as well. Depending on how it’s set up, a private foundation can have several important tax advantages that can benefit the foundation’s owners, employees, and grantees. When most people think of private foundations, they think of large-scale entities like the Bill & Melinda Gates Foundation. However, there’s no minimum amount of money required to start a foundation; anyone can secure its benefits for themselves and those they care about. 

Some of the benefits of setting up a private foundation include:

  • Being able to make your philanthropic efforts more streamlined, focused, and effective.
  • Family members, especially of small foundations, can have more say in where their charitable donations go in the long run.
  • While individuals can’t claim tax deductions on donations to individuals, non-charitable entities, or foreign nonprofits, foundations can. This allows family members to make tax-deductible donations to the foundation, which in turn can then assist these other organizations with less taxation if proper IRS procedures are followed.
  • The vast majority of income earned from the foundation’s investments is sheltered from taxation.
  • Foundations have the ability to give consistently across years, instead of being faced with the problem of having to spend their entire budget that nonprofits occasionally run into. This allows more room for saving money to be used in the future.
  • Family members and others can be provided reasonable compensation for services they render to the foundation. This includes reimbursement for travel, lodging, and other expenses.
  • Real estate donations to the foundation are not subject to capital gains taxes.
  • If assets are transferred to the family foundation, they are generally not subject to estate taxes. 

These are just a few of the benefits of forming a foundation. Those interested in creating one would benefit from legal counsel from an experienced attorney.

Ryan Wright has experience as a prosecutor and has conducted numerous trials and courtroom hearings. He has worked as a Deputy County Attorney and an Assistant District Attorney at the Laramie County District Attorney’s Office. While working as a prosecutor, Ryan focused on narcotics and complex felonies and misdemeanors from DUI to domestic violence. Prior to becoming a prosecutor, Ryan was in private practice working in the areas of corporate and commercial law in New York.  Ryan brings his substantial courtroom and trial experience to every case to fight for a successful outcome for every client.

Ryan practices in appealsbusiness lawcriminal defensefamily lawpersonal injury, and general practice.

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