Articles From Lumsden McCormick

Nonprofits occasionally receive donations of tangible property such as real estate, jewelry, or business inventory. What's important about these donations, is knowing how to value these gifts for compliance and accurate reporting. Most items are valued at fair market value, but factors like restrictions, unrelated use, and donor cost basis can affect the calculation. 

Thinking about guaranteeing a loan for your closely held corporation? Learn the tax implications, including business vs. nonbusiness bad debt deductions, and how to minimize risk. 

What happens when there's doubt a business or government agency can stay afloat? Here, we break down the "going concern" principle and explain how organizations assess their ability to meet obligations. Learn what triggers disclosure requirements, the role of management in addressing financial uncertainty, and how it all impacts an auditor's report.

The OBBB introduces several changes to tax policy that impact both businesses and individuals.

OBBB panel discussion held on September 25, 2025, with experts from Lumsden McCormick and Bond, Schoeneck & King.

An Irrevocable Life Insurance Trust (ILIT) can help keep life insurance proceeds out of your taxable estate, reducing potential estate tax liability. By transferring ownership of a policy to an ILIT or having the trust purchase a new policy, you ensure the death benefit passes tax-free to beneficiaries. While ILITs offer significant advantages for high-net-worth individuals, they come with complexities such as gift tax considerations and loss of control, making professional guidance essential.

Giving Tuesday is a global movement that inspires generosity during the holiday season, encouraging nonprofits, businesses, and individuals to give back through donations, advocacy, and volunteerism. It offers organizations a powerful opportunity to raise funds, build awareness, and engage their communities. With participation growing each year, planning ahead and setting clear goals can help maximize impact and strengthen connections with supporters.

Strong recordkeeping is essential for business success, helping ensure accurate financial reporting, compliance, and the ability to defend tax deductions. A recent tax court case highlights how poor documentation can lead to denied deductions and penalties, underscoring the need for practices like separating business and personal finances, maintaining contemporaneous records, and using reliable accounting systems. Implementing these measures protects your business from costly mistakes and IRS scrutiny.

Intrafamily loans can be a flexible way to transfer wealth, support major purchases, and preserve family assets while offering tax advantages—when structured correctly. To avoid IRS reclassification as a gift, these loans must follow strict formalities, including charging interest at the applicable federal rate and documenting repayment terms. While financially beneficial, they carry emotional risks, so careful planning and professional guidance are essential.

Borrowing can help nonprofits fund major projects or manage cash flow gaps, but it comes with higher interest rates, strict lender requirements, and added risk. Understanding loan types—such as lines of credit, bridge loans, and long-term financing—and preparing detailed financial documentation are essential steps before applying. Careful planning ensures your organization avoids costly mistakes and secures funding that aligns with its mission.