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Gifts of Business Interests

As a business owner, you have the opportunity not only to build your business and accumulate wealth for yourself and your family, but also to accomplish your philanthropic goals through charitable planning. A gift of your corporate stock or assets can provide you with tax and income benefits and help support the University of Indianapolis.

Benefits of gifts of business interests

• Receive a charitable income tax deduction
• Avoid tax on the sale of your business stock or assets
• Receive lifetime payments if your business stock or assets are used to fund a life income gift

How gifts of closely held stock work

1. Give a percentage of your voting or non-voting shares in your business to us outright and receive an income tax deduction. We will hold your shares for a future sale or redemption and can use any dividends paid for our educational purpose.
2. If your corporation is an S corporation, there are special rules that apply to gifts of corporate stock. Please contact us to discuss the most tax-efficient way to structure your stock gift.

How gifts of business assets work

1. If your business makes a gift of a non-inventory asset, it will receive a charitable income tax deduction based on the appraised fair market value of the asset.
2. The income tax deduction for a gift from a business is limited to 10% of the corporation's taxable income. Your business may carry forward any unused deduction up to five years.
3. If your business is an S corporation, the charitable deduction will flow through to the shareholders in proportion to their ownership interest. Check with us on the most tax-efficient way to make a gift of corporate assets from your business.

Additional Information

Business Succession Planning and Charity - When you are ready to sell your business, before you sign a binding agreement, consider a charitable gift to reduce or completely avoid capital gains on the sale. If you give enough of an interest in your business to the University of Indianapolis you can use the resulting charitable income tax deduction to offset part or all of the capital gains on the interest you retain and sell.

Tax Planning Strategies for Business Owners - If you would like to sell your business and receive income, ask us how you can transfer part or all of your business stock or assets to fund a charitable remainder trust. The trust will sell your business interest tax-free and pay you (and your spouse) income for life. You will receive a charitable income tax deduction to further offset any capital gains.

Next Steps:

1. Contact UIndy's Office of Gift Planning at 317-791-2553 or [email protected] for additional information on gifts of a business interest or to speak with Darcy about which appreciated asset gift is right for you.
2. Seek the advice of your financial or legal advisor.