Using Business Stock for Donations

Charitable Giving Strategies for the Business Owner

If you hold stock in a closely held business, you may be able to use that stock as a powerful way to support your charitable goals in the future.

Closely held stock* is most often used in the form of an outright gift. You can make a gift of closely held stock as long as the constituting documentation for the business permits additional owners and the business is debt-free. The donation of closely held stock first requires you to value the interest in the business entity.

Review this checklist to see if you may benefit from donating closely held stock. Then, consult your professional legal and tax advisors to see how to maximize the benefits of this tax-efficient strategy for making a difference.

  • You are a majority shareholder in a closely held corporation.
  • You would like to remove retained earnings from the corporation, without having them taxed again.
  • You would like to maintain a controlling position in the corporation's outstanding stock.
  • You would like to avoid capital gains taxes on the shares you donate to Innovia Foundation.
  • You would like to receive a federal income tax deduction for the full appraised value of the gift.
  • You have a charitable intent.

Click on the links below to see the additional ways to fund your gift with closely held stock:

* A gift of closely held stock requires special handling, so you should always consult with your legal or tax advisor first.

Not Sure How to Begin Planning? Download our FREE Personal Estate Planning Kit

Next Steps

  1. Contact Innovia’s Gift Planning Team at 509-624-2606 or giftplanning@innovia.org for additional information on giving a gift of closely held stock.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Innovia Foundation in your plans, please use our legal name and federal tax ID.

Legal Name: Innovia Foundation
Address: 818 West Riverside Avenue, Suite 650, Spokane, WA 99201-0909
Federal Tax ID Number: 91-0941053

818 W. Riverside Ave., Ste. 650
Spokane, WA
99201-0909

A charitable bequest is one or two sentences in your will or living trust that leave to Innovia Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

I , _____________, of ____________________ County, ______________State, declare this to be
[the First Codicil to] my Last Will dated ___________________. [I direct that paragraph __ of Article ___
of my Last Will to read as follows:] I give my estate [or ___ percent of the rest and remainder of my estate] [or $_____ from my estate] to Innovia Foundation, (Spokane, Washington), a Washington State nonprofit corporation, TIN 91-0941053.
This gift shall be added to [name of your endowment fund or other existing fund], a separate fund as described in the Fund Agreement of that name.

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is one you set up to be managed by a nonprofit organization, such as Innovia Foundation. When you donate to your fund, you receive a tax deduction. Then, you recommend distributions from your fund to charities. The full amount of your gift can be available to distribute, or your fund can be invested, and it will grow tax-free.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Innovia Foundation as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Innovia Foundation as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Innovia Foundation where you agree to make a gift to Innovia Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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