Charitable organizations now have more flexibility to use single member limited liability companies (“LLCs”). In Notice 2012-52, the IRS stated that contributions to a single member LLC that is wholly owned by a section 501(c)(3) organization will be treated as a contribution by the donor to the parent charitable organization. As an example of the impact of this Notice, charities will be able to use a wholly-owned LLC as a fundraising organization without concerns over the deductibility of contributions to the LLC. The Notice is a welcome pronouncement for the tax-exempt organization community.
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