In Notice 2012-52; 2012-35 IRB 1, the IRS sets forth its position that if a charity owns a single member LLC a contribution to the LLC is the same as a contribution to the charity. For more than a decade the IRS had refused to rule on the issue, for mysterious if not downright inexplicable reasons. The Notice states:
If all other requirements of § 170 are met, the Internal Revenue Service will treat a contribution to a disregarded SMLLC that was created or organized in or under the law of the United States, a United States possession, a state, or the District of Columbia, and is wholly owned and controlled by a U.S. charity, as a charitable contribution to a branch or division of the U.S. charity. The U.S. charity is the donee organization for purposes of the substantiation and disclosure required by §§ 170(f) and 6115. To avoid unnecessary inquiries by the Service, the charity is encouraged to disclose, in the acknowledgment or another statement, that the SMLLC is wholly owned by the U.S. charity and treated by the U.S. charity as a disregarded entity. The limitations of § 170(b) apply as though the gift were made to the U.S. charity.
Unfortunately, the ruling does not refer to sections 2055 or 2522 but all but the most conservative practitioner appears to be overlooking the potential gift tax issue.
Turney P. Berry