Would it be possible to legitimately write some sort of standardized financial instrument that functions as a loan with no repayment date, with options for conversion into charitable donation?
Speculations (non-lawyer here) —
(1) Maybe there’s something equivalent to a SAFE Note (invented by YCombinator to simplify and standardize startup financing in a way friendly to both parties). It seems like a decent jumping-off point:
(2) On the other hand, there’s a variety of mechanisms where you can’t just do clever stuff. And there’s a variety of arcane rules. You can, I think, donate property that’s appreciated in value without paying capital gains first for instance, but maybe there’s specific definitions around the timing of cash flows, donations, and deductions?
(3) On the other-other hand, seems like American tax policy in general is very amenable to people supporting worthy charitable causes.
(4) On the other-other-other-hand, you’d have to make sure it’s not game-able and doesn’t result in strange second-order consequences.
(5) And finally, if it’s ambiguous, it seems like the type of thing where it’d be possible to get some sort of preliminary ruling from the relevant authorities. (Presumably the Treasury/IRS, but maybe someone else.)
Seems like a good idea though? If someone donates $10k a year for 5 years, it seems reasonable that they’d be able to write off that $50k at the end of the end of 5 years.
I don’t know much about this, but one thing that comes to mind is that if it’s optional (which I think it has to be to postpone the effective date of the donation?) then what happens if the ‘donor’ doesn’t choose to convert it to a donation?
then what happens if the ‘donor’ doesn’t choose to convert it to a donation?
Same thing that happens when you fail to meet the requirements for any other financial instrument. You go into debt, your credit rating takes a plunge, and debt collectors will start harassing you for money.
Do we have any lawyers here at LessWrong?
Idea:
Would it be possible to legitimately write some sort of standardized financial instrument that functions as a loan with no repayment date, with options for conversion into charitable donation?
Speculations (non-lawyer here) —
(1) Maybe there’s something equivalent to a SAFE Note (invented by YCombinator to simplify and standardize startup financing in a way friendly to both parties). It seems like a decent jumping-off point:
https://en.wikipedia.org/wiki/Simple_agreement_for_future_equity_(SAFE)
(2) On the other hand, there’s a variety of mechanisms where you can’t just do clever stuff. And there’s a variety of arcane rules. You can, I think, donate property that’s appreciated in value without paying capital gains first for instance, but maybe there’s specific definitions around the timing of cash flows, donations, and deductions?
(3) On the other-other hand, seems like American tax policy in general is very amenable to people supporting worthy charitable causes.
(4) On the other-other-other-hand, you’d have to make sure it’s not game-able and doesn’t result in strange second-order consequences.
(5) And finally, if it’s ambiguous, it seems like the type of thing where it’d be possible to get some sort of preliminary ruling from the relevant authorities. (Presumably the Treasury/IRS, but maybe someone else.)
Seems like a good idea though? If someone donates $10k a year for 5 years, it seems reasonable that they’d be able to write off that $50k at the end of the end of 5 years.
I don’t know much about this, but one thing that comes to mind is that if it’s optional (which I think it has to be to postpone the effective date of the donation?) then what happens if the ‘donor’ doesn’t choose to convert it to a donation?
Same thing that happens when you fail to meet the requirements for any other financial instrument. You go into debt, your credit rating takes a plunge, and debt collectors will start harassing you for money.