Graveyard Bonds

I just had an idea I'll call "the graveyard bond". It's probably not new, being pretty obvious, but it's something I think I'll actually use tonight. And it has tax advantages that are potentially of great interest on Wall Street; if nobody's using graveyard bonds, I'd be curious as to why not. The idea is to defer interest income taxation. How, I'll get to after my graveyard story.

My church is setting up a graveyard. To do so, they've set up a separate entity, with its own accounts. Non-church graveyards must, by law, set aside a certain amount of money for perpetual maintenance. Church ones in Indiana don't, but as a matter of good financial stewardship, our church wants to follow the regulations voluntarily.

The hope is that the graveyard will be self-financing, or perhaps even profitable eventually. It looks like a good business project to me. The church, however, is short of capital (the church building itself has had its extension at a halt for a couple of years because of lack of funds to finish the interior). Thus, I was asked if I'd be willing to contribute some capital--- say, $20,000---to be repaid with interest once the graveyard had the cash flow to do so.

I'm willing, and I think it is not only a good project spiritually, but financially. I probably won't ask for interest, since I donate to the church anyway and it just complicated things to earn income from the church, pay it back as a donation, and take a deduction to cancel out the income for tax purposes. But I was thinking in the car about how I'd want to arrange it if