Related Entites; Who Gets the Deduction?

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Taxpayer was allowed a deduction for a charitable contribution by a Related Entity – Assume that a partnership (“PSP”) is 99% owned by a Trust, and the other 1% is owned by a related corporation (“INC”). Assume that the related corporation issued a $5 million check for a charitable contribution to a qualified charity.

The $5 million charitable contribution was not reflected on PSP’s original partnership tax return, and no charitable deduction was claimed by the Trust; instead, three years later the partnership’s return was amended to reflect the charitable contribution, at which time the Trust filed an amended return to …read more

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