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Closely Held Stock

A Gift That Lets Everyone Win

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

Suppose you decide to donate some shares (few enough so that you retain 51% ownership) to Ruth Eckerd Hall and we then present the stock to your corporation for redemption. If your corporation accepts our offer, they can use retained earnings for the purchase.

Ruth Eckerd Hall wins 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. It is a favorable option that benefits you and the Hall.

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

We invite you to discuss your giving objectives and options with Kathy Rabon, Chief Development Officer at 727.712.2718.

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