HIGHLIGHTS
- Provided tax counsel in the integration of complex assets and in-kind donations into the Foundation’s portfolio.
- Provided strategic tax planning to leverage capital losses, significantly reducing excise tax liabilities.
- Enhanced accuracy in tax reporting by taking over Trust tax preparation.
BACKGROUND
The Cotsen Foundation for the ART of TEACHING (Foundation) faced a unique situation after the passing of its founder, Lloyd Cotsen. The Foundation was named a beneficiary of the founder’s personal trust, receiving various complex investments and in-kind estate distributions. This scenario required sophisticated financial and tax strategies to ensure compliance and financial health.
GHJ'S APPROACH
Understanding the sensitive and complex nature of the inheritance, GHJ’s Nonprofit Practice engaged in thorough discussions with the Foundation’s management team and tax advisors to grasp the nuances of the assets being transferred. The team provided expert guidance on properly recording the estate distributions in the Foundation’s books and navigating the tax implications associated with these distributions.
GHJ applied a customized approach based on the client’s goals:
- Financial Stewardship: The Foundation benefited from GHJ’s counsel on asset transfers and tax planning which aided in optimizing the Foundation’s financial health.
- Strategic Support: GHJ’s proactive measures and strategic advice helped prepare the Foundation for future challenges to ensure long-term sustainability.
- Exceptional Client Service: GHJ's commitment to constant communication and personalized service reinforced the Foundation’s confidence in managing complex financial scenarios.
Applying this approach and working in collaboration with the Foundation’s internal and external advisors, GHJ took over tax preparation services to advise the Foundation on tracking the cost basis of incoming investments.
RESULTS
Through diligent planning and continuous communication, GHJ supported the Foundation in accurately incorporating the inherited assets into its financial system, maintaining proper cost basis tracking and utilizing capital losses to mitigate excise tax liabilities. This strategic approach assisted the Foundation in stabilizing its financial position and setting a robust foundation for future growth and success.
“GHJ played an important role in guiding us through the audit and tax regulations and requirements, and they continue to provide unwavering support whenever we have questions,” said Foundation CFO Kamyab Hashemi-Nejad. “I have the highest respect for everyone on the GHJ team with whom I have ever worked.”
GHJ is committed to fostering strategic partnerships and providing accounting solutions that support the long-term success of its clients. The Firm’s dedicated focus on nonprofits, combined with an unwavering commitment to quality service and communication, ensures that clients like the Cotsen Foundation for the ART OF TEACHING are well-equipped to navigate the complexities of their financial landscapes.
With GHJ’s assistance, the Foundation is positioned to continue its mission of supporting continued teacher training and development to the benefit of their students with enhanced financial health and confidence.
