On the Record: Charity Laws Face Changes

For example, an insider is subject to excise taxes upon the sale of property to a private foundation, even if the sale price is below market value and thus benefits the foundation.

Public charities, however, can engage in such a transaction with an insider as long as the sale price is fair-market value. Self-dealing transactions generally include the following transaction between an insider and a private foundation: the sale, exchange or leasing of property; the lending of money or other extension of credit; the furnishing of goods, services or facilities; the payment of unreasonable compensation by a private foundation; and the transfer to or use by an insider of a private foundation’s income or assets.