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In reply to the discussion: "REPORT: Wal-Mart Heirs Give Next To Nothing To Their Charitable Foundation" [View all]muriel_volestrangler
(101,311 posts)42. That's part of the estate tax dodging
The type of Jackie O. trust used by the Waltons doesnt generate a break on income taxes. Instead, the big potential saving is on gift and estate taxes. When a donor sets one up, the IRS assesses how much gift or estate tax is due, based on how much of the trusts assets will end up benefiting charity and how much will go to heirs. Most donors structure the trusts so that the heirs estimated leftover is zero or close to it.
The IRS makes its estimate using a complicated formula tied to the level of U.S. Treasury bond yields during the time when the trust is set up.
If the trusts investments outperform that benchmark rate, then the extra earnings pass to the designated heirs free of any estate tax. The rate has been hovering near all-time lows since 2009. For trusts set up this month, its 1.4 percent.
With a big enough spread between the actual performance and the IRS rate, a Jackie O. trust can theoretically save so much tax that it leaves a family richer than if it hadnt given a dime to charity.
http://www.bloomberg.com/news/2013-09-12/how-wal-mart-s-waltons-maintain-their-billionaire-fortune-taxes.html
The IRS makes its estimate using a complicated formula tied to the level of U.S. Treasury bond yields during the time when the trust is set up.
If the trusts investments outperform that benchmark rate, then the extra earnings pass to the designated heirs free of any estate tax. The rate has been hovering near all-time lows since 2009. For trusts set up this month, its 1.4 percent.
With a big enough spread between the actual performance and the IRS rate, a Jackie O. trust can theoretically save so much tax that it leaves a family richer than if it hadnt given a dime to charity.
http://www.bloomberg.com/news/2013-09-12/how-wal-mart-s-waltons-maintain-their-billionaire-fortune-taxes.html
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"REPORT: Wal-Mart Heirs Give Next To Nothing To Their Charitable Foundation" [View all]
applegrove
Jun 2014
OP
Yes, but according to the website "General admission to Crystal Bridges is sponsored by Walmart"!!
hatrack
Jun 2014
#39
People fund charitable foundations to avoid taxes. No taxes, no donations. n/t
lumberjack_jeff
Jun 2014
#25