A few tax considerations are at play if one is donating an
interest in a GP or management company, warn tax experts Dahlia
Doumar and Carl Merino.
Donor-advised funds (DAFs) have become
increasingly popular vehicles for charitable giving in the US,
including for donors in the private fund management community. For
many such donors, a stake in a fund or its GP or management company
(if separate) may be the most logical asset available to fund
long-term philanthropic goals. However, certain tax issues,
including the rules on excess business holdings, must be considered
prior to contribution, particularly if one is donating an interest
in a GP or management company.
Why DAFs?
Very generally, a DAF is an account created within a sponsoring
public charity whereby the donor (or a designee) is permitted to
make recommendations as to charitable expenditures by the DAF and
investment of its assets. Provided certain requirements are
satisfied, a donation to a DAF is
