Tax Benefits of Creating a Private Foundation – For Advisors

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Categories: Advisors

Search Topics: Tax Planning for Individuals

In addition to the many philanthropic reasons a donor might have for establishing a private foundation, there are also short-term and long-term tax benefits to consider. A donor may be able to take advantage of four main tax benefits when he or she gives to a private foundation:

  • Reducing the donor’s income tax for each year in which a contribution is made.
  • Income-tax-free growth of assets which have been contributed to the foundation.
  • Avoiding capital gains taxes depending on the characteristics of property contributed.
  • Reducing or eliminating potential estate taxes.

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