What do you think it would have cost to buy out Danny's Life Tenancy? If they would have done it that way?
Perhaps there wouldn't be any problem if 3ABN bought Danny's life tenancy for the same price that Danny bought the life tenancy for from 3ABN.
Did Danny ever report the life tenancy as income if he didn't pay FMV for it? Why not ask him that question and report back?
If he says that he did report it to the IRS, or did pay 3ABN FMV for it, see if you can get adequate documentation from him to prove it, and then post it here. That should about settle it.
EXCEPT that 3ABN in 1998 reported selling a house with a book value of over $50,000 for only $6,129. That right there indicates that the 1998 house deal was a section 4958 excess benefit transaction, in violation of the Internal Revenue Code, and/or IRS regulations.
If 3ABN's interest in the house was only worth what Danny paid for it, if he paid anything at all, then 3ABN would not have reported a loss on the sale in their Form 990.
Correct?
First of all, I am not a lawyer nor a CA/CPA - reread this line as needed.
In the US, at that point, people could be gifted via a donor for $10,000 a year tax free, or more if the DONOR pays taxes on it, so both of the people who benefited from the live Tenancy would qualify for $20,000 per year from the single donor, under some circumstances, it could be $40,000 per year if both husband and wife gave. ( I think it is $11,00 per year now)
So if that is the avenue they took, they would not have to claim income on this if they were given this house with a life tenancy with the proceeds to be transfered to 3ABN.
In another thread, Fran rambled on about auditing issues with the Trust Accounting, I had explained that by saying board have a right to make judgement calls on what they deem to be unnecessary ongoing expenses. Then the auditors, have a duty to make note of that. It is neither bad nor good, it is a statement for the record. The valuation on that house could have well been one of those. I do not know, nor do I want to, nor is the 3ABN board responsible to me, nor do they have a duty to explain it to me, nor you.
We just got audited, and there were several comments made by the auditors where there was deviation from policy. All of these deviations had board actions approving them BEFORE THE AUDIT, it is the auditors duty to write those up.
There is a problem, putting trust in someone who is a book keeper who gives accounting type of opinions on things that they really are not fully understanding.
How will you ever be able to undo the lack of confidence you have places in thousands of folks around the world in the accounting department of 3ABN?
Your comments were like newspaper headline news, any retraction of them, and you do need to do so, will be like on page 67 on the bottom left hand page.
Just because a leader divorces his wife, be that just or unjust, does not make the accounting department incompetent.As one person said, "Stories spread about 3ABN do not have to be true, they just have to be told"