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[quaddie47]

Bob

that link is for when you donated to a Charity, not from a Charity to a person. (edited after  I reread your original post, I missread form for a persons name..

In the case of a charity giving property to a founder/director/officer for less than fair market value, that's called a section 4958 excess benefit transaction, and can get the charity and those involved in serious trouble.

It's reported on IRS Form 990.

Bob.

Do you understand what Stan is talking about here?  It does not seem that 3abn gave DS AND LS anything at all in 1998.  They sold them something.  Have you at any time determined what the value of the remainder of the life estate would have been when it was sold and if it exceeded significantly the price paid by DS AND LS? 

[Bob Pickle]

When we spoke before,.....(edited for emphasis)

When you spoke before?  Stan are you the person Bob kept claiming he talked to about this transaction even though it was clear that when he did Bob did not have all the relevant information to present to the individual for consideration?

No. The fellow I mentioned speaking to was an trust services expert who was giving a seminar. While Stan may also be a trust services expert, he was not the one I was referring to.

I also spoke with an attorney about the transaction. In both cases, I believe I mentioned the life estate part of the transaction.

[Bob Pickle]

Bob

that link is for when you donated to a Charity, not from a Charity to a person. (edited after  I reread your original post, I missread form for a persons name..

In the case of a charity giving property to a founder/director/officer for less than fair market value, that's called a section 4958 excess benefit transaction, and can get the charity and those involved in serious trouble.

It's reported on IRS Form 990.

Bob.

Do you understand what Stan is talking about here?  It does not seem that 3abn gave DS AND LS anything at all in 1998.  They sold them something.  Have you at any time determined what the value of the remainder of the life estate would have been when it was sold and if it exceeded significantly the price paid by DS AND LS? 

The book value of the property as reported by 3ABN/Danny to the IRS greatly exceeded the price paid by Danny and Linda. That point has been clear from the get go, and is indisputable.

Just common sense shows that there is something shady here. Otherwise, 3ABN could give Jody and Trinity a life estate in a piece of property they never owned, and then sell the little girls next year what the remainder interest would be at the time the little girls are 90 years old.

If it is permissible to sell the remainder interest like this, and I do not know if it is, then shouldn't that interest be calculated at the age they are now, not at the age they will be 20 or 30 or 40 or 50 years in the future?

[Nosir Myzing]

Bob

that link is for when you donated to a Charity, not from a Charity to a person. (edited after  I reread your original post, I missread form for a persons name..

In the case of a charity giving property to a founder/director/officer for less than fair market value, that's called a section 4958 excess benefit transaction, and can get the charity and those involved in serious trouble.

It's reported on IRS Form 990.

Bob.

Do you understand what Stan is talking about here?  It does not seem that 3abn gave DS AND LS anything at all in 1998.  They sold them something.  Have you at any time determined what the value of the remainder of the life estate would have been when it was sold and if it exceeded significantly the price paid by DS AND LS? 

The book value of the property as reported by 3ABN/Danny to the IRS greatly exceeded the price paid by Danny and Linda. That point has been clear from the get go, and is indisputable.

Just common sense shows that there is something shady here. Otherwise, 3ABN could give Jody and Trinity a life estate in a piece of property they never owned, and then sell the little girls next year what the remainder interest would be at the time the little girls are 90 years old.

If it is permissible to sell the remainder interest like this, and I do not know if it is, then shouldn't that interest be calculated at the age they are now, not at the age they will be 20 or 30 or 40 or 50 years in the future?

I do not think it necessary to keep throwing children's names into these topics. Especially when they have nothing to do with this subject.

Maybe this will make it easier.

The trustee is in charge of the total.

Lifetime interest plus remainder interest equals total.
Total minus lifetime interest (already given to LS and DS by a donor) equals remainder interest (and the price paid by LS and DS to 3abn, for what the donor had given to 3abn)

And yes it is legal that is why their are legal charts to determine the amounts.

The remainder interest which was gifted to 3abn, is what would have been  left after the life trust was over with. That would not have been until after the deaths of Linda or Danny. That is why the statistical time of their deaths had to be used.

To date that in 1998 would have made Danny and Linda buy what already was theirs. They did not die in 1998.

Perhaps Stan can explain how this works better than myself, or correct me if I am wrong?

Or a CPA or accountant here can do so?

[Snoopy]

I do not think it necessary to keep throwing children's names into these topics. Especially when they have nothing to do with this subject.

Maybe this will make it easier.

The trustee is in charge of the total.

Lifetime interest plus remainder interest equals total.
Total minus lifetime interest (already owned by LS and DS) equals remainder interest (and the price paid by LS and DS.)

And yes it is legal that is why their are legal charts to determine the amounts.

The remainder interest which was gifted to 3abn, is what would have been  left after the life trust was over with. That would not have been until after the deaths of Linda or Danny. That is why the statistical time of their deaths had to be used.

To date that in 1998 would have made Danny and Linda buy what already was theirs. They did not die in 1998.

Perhaps Stan can explain how this works better than myself, or correct me if I am wrong?

Or a CPA or accountant here can do so?

Cindy, what makes you think anybody here wants to answer your accounting questions after you make comments like this:

Mr Pickle along with his financial advisors looked at the partial documents they had and came to the erroneous conclusion that this was an excess benefit, paid retirement, and a purchase of a property for below the market price.

Besides, folks have been trying for years now to correct you when you are wrong, but you pay no attention...sigh...




Edited to fix typo

[Stan]

The donee specifically must say, "This acknowledgment does not represent agreement with the claimed fair market value." Thus, it would appear, any receipt the donee gives cannot have a dollar amount on it, which, I think, is what Fran said somewhere.

Bob,  what i was trying to show was that price WAS the fair market value of the home.  I do regret still, that I did not have any 'hands on' experience when you and I first talked about this, months or years ago.

[Stan]

No. The fellow I mentioned speaking to was an trust services expert who was giving a seminar. While Stan may also be a trust services expert, he was not the one I was referring to.

YIKES, please don't confuse me with being an expert, every state province seems to have different rules and regulations.

[Bob Pickle]

The donee specifically must say, "This acknowledgment does not represent agreement with the claimed fair market value." Thus, it would appear, any receipt the donee gives cannot have a dollar amount on it, which, I think, is what Fran said somewhere.

Bob,  what i was trying to show was that price WAS the fair market value of the home.  I do regret still, that I did not have any 'hands on' experience when you and I first talked about this, months or years ago.

I do not see how anyone will agree that $6,139 was the FMV of a home sold one week later for $135,000. But, do you have any links or quotes that define FMV in the way that you suggest?

Remember, 3ABN essentially admitted that the home was worth far more than $6,139 when they reported its book value at more than $50,000.

No. The fellow I mentioned speaking to was an trust services expert who was giving a seminar. While Stan may also be a trust services expert, he was not the one I was referring to.

YIKES, please don't confuse me with being an expert, every state province seems to have different rules and regulations.

I was trying to avoid sounding as if I was saying that you weren't an expert.

[Bob Pickle]

I do not think it necessary to keep throwing children's names into these topics. Especially when they have nothing to do with this subject.

I disagree. To make the point that I am trying to make, I have to pick the youngest individuals possible that are members of Danny's family.

Don't you see that in this way 3ABN could transfer millions of dollars of its assets to Danny, getting paid next to nothing? And don't you see that it appears that you don't care, and that you would justify such an unrighteous transfer by claiming that there wasn't anything illegal about it, all the time avoiding the question of whether it was ethical or proper?

Again, what if 3ABN gave Jody and Trinity a life estate in a property valued at $100 million, and then a year later sold them the remainder interest at its value when they would be 90 years of age. Anything wrong with that?

[Stan]

Thanks for your kind remarks about me being an expert, I understand now what you meant.

Let me repackage this, and my numbers are just an example.

I believe you could once by $100 Education savings bonds for something like $25.00.  They did not mature for $20 years or something like that.

The NPV (Net Present Value) was only $25.00 even the they were $100.00 savings bonds.

I would sell you my little humble abode, today's value is about $150,000 or something, I would sell you that for $30,000 cash today, you can take possession of it in 50-60 years. Make sure you pay the insurance and taxes. Similar thing. (I think the agreement could be made that I would pay the insurance etc, not to sure)

My initial example was we are being gifted, via an estate,  a nice house given to the conference, it may well be worth over $1,000,000.00  the estate tax accountant wants a charitable receipt, to close up the estate.

What is going to be the figure on the receipt?  $1,000,000 or the current appraised value?  NOPE, it will likely be under $100,000, the same price we would sell it to the person who has the life tenancy. I can expect some well meaning folks to will say "WHAT the conference GAVE AWAY a million dollar house for $100,000"

[Stan]

Did what I say seem understandable to those who had another position?

[Stan]

I had thought that I had put this on the more private section, it was not my intent to review this and dialog with Bob on this where it might embarrass him or have it so publicly he would admin errors on his judgement call.

I have been well known to make a lot of mistakes,  just ask my kids, wondering if someone move it out here or if I originally posted in the wrong place..

[Snoopy]

I had thought that I had put this on the more private section, it was not my intent to review this and dialog with Bob on this where it might embarrass him or have it so publicly he would admin errors on his judgement call.

I have been well known to make a lot of mistakes,  just ask my kids, wondering if someone move it out here or if I originally posted in the wrong place..

Stan,

It is the "3ABN Other" forum that is restricted from public viewing.  I would be happy to move your comments there for you.  However, my experience with Bob has been that if he has made a mistake or if other facts come to light that cause him to change his position on an issue, he prefers to have it out in the open so that the record can be set straight.

So I'll leave it up to you two - just send me a PM if somebody wants this moved elsewhere.

Thanks,

Snoopy

[Bob Pickle]

Nah, leave it here.

Stan, your example doesn't quite fit the situation, on several counts.

First of all, I can't find anywhere where a 501(c)(3) in the U.S. would give a receipt to a donor for donated property that has a dollar value on it. I just can't find it.

Secondly, your example suggests that the conference would sell the $1 million home for $100,000 to the donor. In this case, Danny wasn't the donor, from all I've seen. If he was the donor he could have proven so almost two years ago, and saved everyone a lot of grief IF that makes a difference.

Thirdly, don't you have to take into consideration the present value of the property when you sell it? I've seen some examples by the IRS of sales of remainder interest of stocks that take present value into consideration.

Fourthly, we still have to remember that 3ABN's books said that the book value of the property was more than $50,000. In your example above, what value would be on the conference's books? $100,000 or $1 million?

[anyman]

You obviously have never taken clothing (which is considered property) to Goodwill. When you drop it off they ask the estimated dollar value, write it on an official Goodwill reciept (yes, it is a 501(c)(3)) and hand it to you.

anyman

Nah, leave it here.

Stan, your example doesn't quite fit the situation, on several counts.

First of all, I can't find anywhere where a 501(c)(3) in the U.S. would give a receipt to a donor for donated property that has a dollar value on it. I just can't find it.

Secondly, your example suggests that the conference would sell the $1 million home for $100,000 to the donor. In this case, Danny wasn't the donor, from all I've seen. If he was the donor he could have proven so almost two years ago, and saved everyone a lot of grief IF that makes a difference.

Thirdly, don't you have to take into consideration the present value of the property when you sell it? I've seen some examples by the IRS of sales of remainder interest of stocks that take present value into consideration.

Fourthly, we still have to remember that 3ABN's books said that the book value of the property was more than $50,000. In your example above, what value would be on the conference's books? $100,000 or $1 million?