Benefits of Gifts of Closely Held Stock

This is an opportunity for you to help your town with a gift of your corporation’s stock. Transferring shares of your corporation’s stock to The Community Foundation for the benefit of an affiliated fund can provide the following benefits:

  • The satisfaction of making a gift today that can be invested in your hometown
  • An immediate personal charitable income tax deduction
  • Bypasses capital gains taxes on the gift of stock
  • Avoids declaration and double-taxation of dividends
  • Allows the corporation to buy back the stock
  • Reduces estate taxes and settlement costs

How to Make a Gift of Closely Held Stock

A business owner who owns the majority of the stock in a family business or corporation transfers shares of his or her stock to The Community Foundation. The Community Foundation then sells the donated stock for fair market value. The gift of stock leaves the business owner in full control of the corporation and without any personal costs. As a result of this gift, the business owner becomes entitled to a charitable deduction for the full fair market value of the stock on his or her personal tax return. Plus, he or she avoids the capital gains tax on the appreciation of the corporation’s stock.