IRS Notice 2012-52 resolves the uncertainty that formerly existed regarding the deductibility of contributions to limited liability companies of which a public charity is the sole member. The notice makes clear that a contribution to a limited liability company wholly owned and controlled by a public charity is treated as a charitable contribution to a branch or division of the member charity.

Even though a single-member limited liability company is generally considered a "disregarded entity" for tax purposes and thus it makes sense that a contribution to such an entity would be treated as having been made to the member charity, this notice provides welcome confirmation of that analysis.

Accordingly, a public charity may now rely on this notice to accept contributions of particular assets (such as real estate) through a limited liability company in order to insulate itself and its other assets from any liability that could be associated with outright ownership of the asset.

The notice goes on to provide that the member charity will be responsible for the disclosure and substantiation requirements in connection with the contribution to its wholly owned limited liability company. As the "donee" of such a contribution, the member charity is required to issue the contemporaneous acknowledgment (required for contributions in excess of $250) and to disclose whether any goods or services were provided in exchange for the contribution.

The notice is effective for contributions made after July 31 but may be relied on for earlier tax years if the period of limitation on refund or credit has not yet expired.