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[Bob Pickle]

What do you think it would have cost to buy out Danny's Life Tenancy?  If they would have done it that way?

Perhaps there wouldn't be any problem if 3ABN bought Danny's life tenancy for the same price that Danny bought the life tenancy for from 3ABN.

Did Danny ever report the life tenancy as income if he didn't pay FMV for it? Why not ask him that question and report back?

If he says that he did report it to the IRS, or did pay 3ABN FMV for it, see if you can get adequate documentation from him to prove it, and then post it here. That should about settle it.

EXCEPT that 3ABN in 1998 reported selling a house with a book value of over $50,000 for only $6,129. That right there indicates that the 1998 house deal was a section 4958 excess benefit transaction, in violation of the Internal Revenue Code, and/or IRS regulations.

If 3ABN's interest in the house was only worth what Danny paid for it, if he paid anything at all, then 3ABN would not have reported a loss on the sale in their Form 990.

Correct?

[Bob Pickle]

Stan,

If three people have a life estate instead of just one, how does that affect the home's value as far as the charitable organization goes? Is the value of the remainder interest about the same, or is it one-third?

[GRAT]

Stan - Sorry but I guess I just don't get it.  Thanks for trying but the whole thing is very confusing and makes no sense to me.   

[childoftheking]

http://www.startribune.com/templates/Print_This_Story?sid=27251534

This sounds so familiar to me. Just click on cancel when the print option comes up.

[Stan]

What do you think it would have cost to buy out Danny's Life Tenancy?  If they would have done it that way?

Perhaps there wouldn't be any problem if 3ABN bought Danny's life tenancy for the same price that Danny bought the life tenancy for from 3ABN.

Did Danny ever report the life tenancy as income if he didn't pay FMV for it? Why not ask him that question and report back?

If he says that he did report it to the IRS, or did pay 3ABN FMV for it, see if you can get adequate documentation from him to prove it, and then post it here. That should about settle it.

EXCEPT that 3ABN in 1998 reported selling a house with a book value of over $50,000 for only $6,129. That right there indicates that the 1998 house deal was a section 4958 excess benefit transaction, in violation of the Internal Revenue Code, and/or IRS regulations.

If 3ABN's interest in the house was only worth what Danny paid for it, if he paid anything at all, then 3ABN would not have reported a loss on the sale in their Form 990.

Correct?

First of all, I am not a lawyer nor a CA/CPA - reread this line as needed.

In the US, at that point, people could be gifted via a donor for $10,000 a year tax free, or more if the DONOR pays taxes on it, so both of the people who benefited from the live Tenancy  would qualify for $20,000 per year from the single donor, under some circumstances, it could be $40,000 per year if both husband and wife gave.  ( I think it is $11,00 per year now)

So if that is the avenue they took, they would not have to claim income on this if they were given this house with a life tenancy with the proceeds to be transfered to 3ABN.

In another thread, Fran rambled on about auditing issues with the Trust Accounting,  I had explained that by saying board have a right to make judgement calls on what they deem to be unnecessary ongoing expenses. Then the auditors, have a duty to make note of that. It is neither bad nor good, it is a statement for the record. The valuation on that house could have well been one of those.  I do not know, nor do I want to, nor is the 3ABN board responsible to me, nor do they have a duty to explain it to me, nor you.

We just got audited, and there were several comments made by the auditors where there was deviation from policy. All of these deviations had board actions approving them BEFORE THE AUDIT, it is the auditors duty to write those up.

There is a problem, putting trust in someone who is a book keeper who gives accounting type of opinions on things that they really are not fully understanding.

How will you ever be able to undo the lack of confidence you have places in thousands of folks around the world in the accounting department of 3ABN?

Your comments were like newspaper headline news, any retraction of them, and you do need to do so, will be like on page 67 on the bottom left hand page.


Just because a leader divorces his wife, be that just or unjust, does not make the accounting department incompetent.

As one person said, "Stories spread about 3ABN do not have to be true, they just have to be told"

[Snoopy]

In another thread, Fran rambled on about auditing issues with the Trust Accounting,  I had explained that by saying board have a right to make judgement calls on what they deem to be unnecessary ongoing expenses. Then the auditors, have a duty to make note of that. It is neither bad nor good, it is a statement for the record. The valuation on that house could have well been one of those.  I do not know, nor do I want to, nor is the 3ABN board responsible to me, nor do they have a duty to explain it to me, nor you.

As a former donor, I EXPECT the 3ABN Board to be responsible to me and all other donors. 

There is a problem, putting trust in someone who is a book keeper who gives accounting type of opinions on things that they really are not fully understanding.

How will you ever be able to undo the lack of confidence you have places in thousands of folks around the world in the accounting department of 3ABN?

Just because a leader divorces his wife, be that just or unjust, does not make the accounting department incompetent.

Chuckle.  No, BIG chuckle.  Apparently you haven't been reading here as long as I thought...

[tinka]

Just because a leader divorces his wife, be that just or unjust, does not make the accounting department incompetent.

Stan,

The accounting department has become incompetent-----because a leader divorced his wife!! 

[Bob Pickle]

In the US, at that point, people could be gifted via a donor for $10,000 a year tax free, or more if the DONOR pays taxes on it, so both of the people who benefited from the live Tenancy  would qualify for $20,000 per year from the single donor, under some circumstances, it could be $40,000 per year if both husband and wife gave.  ( I think it is $11,00 per year now)

So if that is the avenue they took, they would not have to claim income on this if they were given this house with a life tenancy with the proceeds to be transfered to 3ABN.

Since there is no deed saying that May Chung ever owned the house in question, we can safely say that May never gifted the house to Danny.

Since the IRS specifically prohibits 3ABN from gifting a house to Danny since he is an officer, founder, and director, without reporting such as a section 4958 excess benefit transaction, your reference to gift tax doesn't help.

In another thread, Fran rambled on about auditing issues with the Trust Accounting,  I had explained that by saying board have a right to make judgement calls on what they deem to be unnecessary ongoing expenses. Then the auditors, have a duty to make note of that. It is neither bad nor good, it is a statement for the record. The valuation on that house could have well been one of those.  I do not know, nor do I want to, nor is the 3ABN board responsible to me, nor do they have a duty to explain it to me, nor you.

The valuation on the house reported by 3ABN on their Form 990 was over $50,000. I haven't raised a big issue about that figure, though 3ABN, thanks to the lawsuit, did have an obligation to explain it to me, the court, and the general public.

The problem has always been that 3ABN sold the house in question to Danny for far less than what they had valued the house as being worth. They valued it at over $50,000, and sold it to Danny for a measly $6,129.

How will you ever be able to undo the lack of confidence you have places in thousands of folks around the world in the accounting department of 3ABN?

Your comments were like newspaper headline news, any retraction of them, and you do need to do so, will be like on page 67 on the bottom left hand page.

Thus far no one, not anyone, has demonstrated what retractions need to be made. I'm certainly not going to lie by retracting something that is in fact true.

Just because a leader divorces his wife, be that just or unjust, does not make the accounting department incompetent.

I don't recall suggesting that anyone in that department was incompetent. I do recall that it sounded strange to put Emma Lou into that department after she was allegedly let loose from a bank for alleged embezzlement.

3ABN possibly covering Danny's personal, private expenses in this lawsuit, which could be $1 million or more at this point, without reporting this benefit as part of Danny's compensation, that doesn't mean that anyone in the accounting department is necessarily incompetent.

[Johann]

That question has been clarified in the past.