Gifts of Stock

Closely Held Business Stock

A business owner who contributes closely held stock to the Sailing Center will be allowed a charitable deduction for the fair-market value of the stock. An additional benefit is that the donor will escape the potential capital-gain tax on any appreciation in the value of the stock.

Subsequent to the gift, the corporation could purchase the stock from the Sailing Center for cash. This not only enables the donor to retain complete control over the company but also makes cash available to the Sailing Center for its current needs. As long as the Sailing Center is not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.

Gifts of Appreciated Securities

Gifts of appreciated securities include stocks, bonds, mutual funds and other assets. Smart gift planning combines charitable intent with cost-efficient planning techniques. Of critical importance is the kind of asset used to fund the gift. Usually, long-term appreciated property can generate the most favorable tax benefits. Reason: Gifts of such property provide a double benefit - a charitable deduction, in most cases, for the full fair-market value of the property - plus avoidance of any potential capital-gain tax.