Closely Held Stock

If you own a sizable block of stock in a closely held corporation, you may have a gift option that makes everyone happy.

Suppose you decide to donate some shares (few enough that you retain 50% ownership) to us. And then we present the stock to your corporation for redemption. Your corporation uses retained earnings for the purchase.

We win because we receive much-needed funds. But you and your corporation also win.

There's one caveat: the IRS has ruled that you cannot legally bind a charitable organization to go through with the redemption at the time it receives the shares.

But a charitable organization may independently offer the donated stock for redemption, and there's little likelihood that we would fail to do this. It's a favorable option that benefits you and us.

Benefits:

Income tax deduction for the charitable contribution
No capital gains tax on the appreciation in value
No second tax on accumulated earnings by averting a dividend distribution
You maintain control of the corporation