Kosher Bequests and Other Puzzling Questions
By Jackie Jacobs
Some questions that come my way are head scratchers. Here are several of them, including one about Kosher bequests.
Can a person make a bequest to the United States government?
Citizens who would like to make a general donation to the U.S. government may send contributions to a specific account called “Gifts to the United States, c/o U.S. Department of the Treasury.” This account was established in 1843 to accept gifts, including bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs.
Is it Kosher to make a bequest to Israel?
A simple bequest provision to the State of Israel. However, it would not be Kosher to claim a charitable estate tax deduction for such a bequest (or for that matter, for a bequest to any foreign government, political subdivision thereof, or non- U.S. charity).
How can a bequest for Israel’s benefit qualify for a charitable estate tax deduction?
Bequests to a foreign government qualify for a charitable estate tax deduction under Section 2055 of the IRC and Revenue Ruling 74-523, provided that the gifts are for exclusively charitable purposes.
When drafting bequests for the benefit of a foreign government, attorneys should always take care to include the words, “exclusively for charitable purposes.” This removes all doubt about the intended purpose and helps avoid a possible audit by either federal or state tax authorities.
Here’s another way to skin the cat. If your desire is to benefit a foreign country– Israel, for example– consider a bequest to a qualified charity, such as the Columbus Jewish Foundation, with instructions that the gift is be used for the exclusive benefit of charities in Israel.
Individuals who make contributions to domestic charities that transmit funds to foreign charitable organizations may be allowed deductions, provided that the domestic charity does not merely act as a conduit of funds to the foreign organization. To demonstrate this, the domestic organization either must make grants out of its general funds to foreign charitable groups for purposes that it has reviewed and approved, or conduct its charitable operations abroad through a subsidiary formed in the foreign country for administrative convenience.
The Columbus Jewish Foundation assists Jews worldwide through its Israel Endowment and the Overseas Needs Fund. Contributions to these funds are fully tax deductible. Important charitable grants have been made from these endowments to the foreign grants program of the Jewish Federations of North America, the Joint Distribution Committee, and the Jewish Agency for Israel. All meet IRS requirements, and enable the Foundation to honor the desires of its legators who wish to support Israel and Jewish needs throughout the world.
Recent Israel and Overseas Needs grants from the Columbus Jewish Foundation provided charitable aid to Israel during the Operative Protective Edge campaign last summer, and to distressed Jewish communities in the Ukraine, Georgia, Greece, Russia, Venezuela, Argentina, and Sderot, Israel.
As always, call me at (614) 338-2365 if you have questions.
Article appears as originally published in the Ohio Jewish Chronicle, July 23, 2015.
Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.