Key IRS Ruling on Contributions to Single-Member LLCs

The IRS has issued Notice 2012-52, which confirms treatment of a contribution to a disregarded U.S.  single-member limited-liability company that is wholly owned and controlled by a U.S. charitable organization,  as a charitable contribution to the U.S. charitable organization (assuming all other requirements of Section 170 are met). The ruling further sets forth that the U.S. charitable organization would be the donee organization for purposes of the charitable contribution acknowledgement and substantiation rules under Section 170(f) of the Internal Revenue Code. This ruling clears up a longstanding uncertainty for organizations, many of whom use single-member LLCs to conduct activities for a variety of reasons. It is first effective for charitable contributions made after July 30, 2012.