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Infolawyer
Infolawyer, Attorney
Category: Estate Law
Satisfied Customers: 56523
Experience:  Licensed attorney helping individuals and businesses.
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I want to establish a charitable family foundation that my

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I want to establish a charitable family foundation that my heirs and I can control and derive income from for our administrative efforts. I have been told a 501c3 corporation is what I want for this purpose.

Q1: What is the tax rate on investment income generated by the 501c3 or is income tax paid only by the individuals compensated for services rendered to the 501c3 ?

Q2: Is there any limit to the lifespan of such a charitable family foundation?

Daniel :

Hello and thank you for the question. I am sorry to read of this dilemma.

Daniel :

It would be a 501c3

Daniel :

it has to have an educational, social, not for profit purpose

Daniel :

there would be no tax on income where used for charitable purpose

Daniel :

no limit on life span either.

Daniel :

it can come into being now or after the death of a life in being within 21 years of that death

Daniel :

this latter point is called the rule against perpetuities

Daniel :

Is that clear?

Daniel :

awaiting your reply.

Customer:

Thank you.

Daniel :

very welcome

Daniel :

Kindly click on an excellent rating

Customer:

Is there a requirement that the seed capital be depleted to a certain extent every year? Or can the seed money be invested such that only revenues from the seed money be given for charitable work and to sustain the admin costs?

Daniel :

There is not

Daniel :

that will vary from foundation to foundation

Customer:

I plan to have the administrators earn their keep by investing on behalf of the charity. Compensation would be based or increased based upon performance. Which of the various foundations am I looking for, or is that something defined in the 501c3 articles of incorporation?

Customer:

*i would define in the 501c3 articles of incorporation.

Daniel :

In the articles

Daniel :

correct

Daniel :

I wish you the best!

Daniel :

Kindly rate the answer positively

Customer:

thank you for the excellent chat

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