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Tina, Lawyer
Category: Legal
Satisfied Customers: 8775
Experience:  JD, BBA Over 25 years legal and business experience.
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Can the interest on an endowment fund be taxed by the local

Customer Question

Can the interest on an endowment fund be taxed by the local bishop/
(these funds "endowment fund" were to be used only for the parish, as proscribed by the donor)?
Submitted: 2 years ago.
Category: Legal
Expert:  N Cal Atty replied 2 years ago.
Thank you for your question.
In which State was the endowment fund set up?
Is the fund in the form of a trust, a nonprofit corporation, or something else.
Was the endowment created under the Will of the donor?
Do you have a copy of the terms of the endowment?
Customer: replied 2 years ago.
nonprofit corp
not under the will of the donor , but for the sole used of the parish not the diocese.
It is part of the endowment that the diocese set up. An umbrella policy under which all endowment funds are handled.
Customer: replied 2 years ago.
Under the terms of the endowment we can take out 5.4% on an annual basis for the use of the parish.
These are the only terms under which the parish is restricted. The question is then, can the diocese tax the 5.4%
that the parish receives on an annual basis?
Expert:  N Cal Atty replied 2 years ago.
I am going to opt out and see if a Michigan Expert can answer this.