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Friday, October 15, 2010

Hey, Secret Big Political Donor, Don’t Forget The 35% Gift Tax

Forbes: "A Los Angeles tax lawyer is telling clients such gifts could be subject to the federal gift tax, which is a hefty 35% this year but is scheduled to rise to a weightier 55% on January 1.

In a memo, Ofer Lion, a lawyer with Mitchell Silberberg & Knupp who specializes in nonprofit organizations, writes that unlike contributions to certain other political organizations, there is no gift-tax exemption written into federal law for contributions to 501(c)(4)’s, which the IRS officially classifies as social-welfare organizations but also are often used for lobbying. And that, he says, raises the possibility that down the road the Internal Revenue Service might come calling for the tax, plus interest, plus penalties. “The IRS may well find irresistible the potential revenue to be raised from assessing gift taxes on 501(c)(4) contributors,” writes Lion."

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