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Friday, February 24, 2006

NY Times: Pickens Deducts $165m Gift to OSU Golf Team, Which Invests It in Hedge Fund Controlled by Pickens

Interesting New York Times article, Billionaire Gives a Big Gift but Still Gets to Invest It, by Stephanie Strom:

Boone Pickens, the often controversial and always colorful Texas oilman turned investor, took advantage of a temporary tax break to make a gift that propelled him into the ranks of the nation's top philanthropists last year. But what Mr. Pickens gave away with one hand he continues to control with the other. At the end of the year, he gave $165 million to a tiny charity set up to benefit the golf program at Oklahoma State University, reaping Mr. Pickens a tax deduction. Records show that the money spent less than an hour on Dec. 30 in the account of the university's charity, OSU Cowboy Golf Inc., before it was invested in a hedge fund controlled by Mr. Pickens, BP Capital Management....

"Sadly, it's another case of rich man manipulating charity for his own benefit," said Marcus Owens, a lawyer who formerly headed the division of the I.R.S. that oversees tax-exempt groups....

To some, the question is whether a wealthy person should get a tax break now for money that has essentially not yet been put to charitable use. By giving the money before 2005 expired, Mr. Pickens was able to take advantage of a provision in Hurricane Katrina relief legislation that allowed him a deduction for a charitable gift equal to 100& of his AGI, double the normal limit of 50%....

(Hat Tip:  Jacob Cogan.)

Update:  Peter Lattman has more here.

http://taxprof.typepad.com/taxprof_blog/2006/02/ny_times_picken.html

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Comments

Does the charity not violate prohibition against private benefit (which is distinct and different from prohibition agaist private inurement)?

Posted by: Eskimo Legend | Feb 24, 2006 11:04:39 AM

Does the charity not violate prohibition against private benefit (which is distinct and different from prohibition agaist private inurement)?

Posted by: slav | Mar 2, 2006 2:57:10 AM

Does the charity not violate prohibition against private benefit (which is distinct and different from prohibition agaist private inurement)?

Posted by: slav | Mar 2, 2006 2:57:46 AM