The Justice Love Foundation

Increase your gift to the Foundation—and your tax deduction—with a simple strategy. Contact our Team for additional assistance.

 

 

Do you own Privately Held S-corp stock, consider Donating to The Justice Love Foundation

Own privately held C-corp stock in a company, consider donating a portion of your holdings to The Justice Love Foundation

 

Do you own S-corp stock in a privately held business that you are considering a sale? Are you planning to take part in a stock buy-back or corporate redemption program? In either case, consider donating a portion of your S-corp stock directly to The Justice Love Foundation. Making a contribution of S-corp stock directly offers two key benefits:

1. You’ll generally get an income tax deduction for the fair market value.

2. Capital gains taxes are eliminated—instead of paying more than 20% in taxes, a greater portion of your gift will be available for the Foundation.

Fair market value of the stock as determined by a qualified appraisal, held for more than one year.

It can be simple and easy. When you donate stock to charity, you’ll generally take a tax deduction for the full fair market value. And because you are donating stock, your contribution and tax deduction may instantly increase over 20%. And whether you prefer to donate stocks, bonds or mutual funds the same benefits apply

How does it work?

The JUstice Love Foundation is a 501(c)(3) public charity, which means it generally will not pay capital gains taxes on the sale of the S-corp stock that you donate. That means your charitable gift instantly increases by the amount you save in taxes, which may exceed 20%. 

This assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%, and that the donor originally planned to sell the stock and contribute the net proceeds (less the capital gains tax and Medicare surtax) to charity.

Tax Benefits of Donating Stock to the Foundation

Total Cost Basis of Shares is generally the amount of money you have invested in the shares of a particular fund or individual security. It represents the basic dollar amount that, when compared to the price at which you sell your shares, tells you how much of a capital gain or loss you have realized.  This assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%. This does not take into account state or local taxes, if any. The effective unrelated business income tax (UBIT) rate for Fidelity Charitable in this instance is 10%.  Fair market value of the stock as determined by a qualified appraisal, held for more than one year.  The discount rate is an estimate reflective of applied discount rates generally seen in the valuations of privately held companies. This assumes a rough range of 5%–10% discount for a minority interest and lack of control. Please note that applied discounts could be higher or lower depending on the nature of the interest and the company itself.

Please note this number refers to the amount of charitable deductions available based on the 8% valuation discount. And, this assumes there is a stock sale and no ordinary income attributed to the sale with a zero cost basis. 

Donating Privately Held S-Corp stock to our Foundation: It’s an excellent choice

Determine whether the contribution prior to the sale would result in an anticipatory assignment of income. If the IRS determines that the sale was prearranged, you may lose the ability to take a tax deduction and be required to pay capital gains tax.

  • Provide more money to the Foundation
  • Eliminate capital gains tax exposure
  • Take a tax deduction

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Let Our Donations Team Assist with a Plan

Nearly half of high-net-worth donors do not take advantage of tax-saving methods that could help them save and give more. Let our Donations Team help you with the opportunity to position yourself by having a quick conversation on the best structure for charitable giving to the Foundation. Please take your time and submit your questions below, we will respond as quickly as possible.

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