Donating special assets – a tax-efficient way to give
For many people, charitable contributions of non-publicly traded assets — private C- and S-Corp stock, restricted stock, limited partnership interests, and other privately held assets — may be tax efficient to donate.
These assets can be highly appreciated and donating them to charity potentially avoids capital gains exposure on the sale of the asset. In addition, donors are also generally entitled to a tax deduction of the full current market value1 (and not just the original cost basis, as in the case for a donation to a private foundation).2
Benefit from our expertise in handling special assets
Charities may not be well equipped to handle contributions of non-publicly traded assets and may have to outsource the compliance and liquidation work; therefore, the net amount available to the charity could be reduced.
The Gift Fund has internal experts and resources to ensure that the contribution is handled as efficiently as possible, allowing the highest possible percentage of the funds from the sale to be available for giving. These proceeds are placed into a donor-advised fund where the donor recommends grants to charity.
Diversify assets – and giving
Because these non-publicly traded assets are often the most highly appreciated assets in a portfolio, they can cause the portfolio to be over-weighted. Donating all or a portion to charity can help rebalance your client's holdings without triggering capital gains.
Donors are also able to diversify their giving with one asset by recommending multiple grants to many charities from their donor-advised fund accounts — as opposed to donating the asset (or assets) to one nonprofit organization.
Maintain giving for the long-term
By making a contribution to the Gift Fund, the nation's largest donor-advised fund program, donors are eligible for a tax deduction on that contribution, in a specific year, while spacing out their grants over a period of years.
Contact us – we can help
If your clients have certain types of assets in a portfolio — beyond traditional cash equivalents and publicly traded securities — the Gift Fund can work with you to determine if donating them could help meet your clients' charitable objectives.
The Gift Fund will consider the following types of assets for acceptance — please contact us if you have a client interested in contributing other types.
| Special Assets Accepted |
|---|
| Private C-Corp Shares (where the exit strategy is a corporate redemption) |
| Private C-Corp Shares (where the exit strategy is a merger or acquisition) |
| Private S-Corp Shares (where the exit strategy is a corporate redemption) |
| Private S-Corp Shares (where the exit strategy is a merger or acquisition) |
| Certain LLC and limited partnership interests (preferably holding no assets other than C-Corp stock) |
| Residential Real Estate |
| Cash Value of a Life Insurance Policy |
| Other Real Estate |
1 As determined by a qualified appraiser in compliance with IRS rules and regulations.
2 Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. The Gift Fund does not provide legal or tax advice. Content provided relates to taxation at the federal level only. Availability of certain federal income tax deductions may depend on whether you itemize deductions. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of the information provided. Charitable contributions of capital gain property held for more than one year are usually deductible at fair market value. Deductions for capital gain property held for one year or less are usually limited to cost basis. Consult an attorney or tax advisor regarding your specific legal or tax situation.
