Gifts of business interests, such as stock in a closely held corporation, S-corporation stock, shares in a professional corporation, or partnership interests-can make a charitable gift that benefits both you and Tufts.
When you make a gift of business interests, you will receive a charitable deduction. You also may be able to use the assets to fund certain types of gifts that provide income in return, such as a charitable remainder unitrust. Alternately, you may use your business interests to create a charitable lead trust that provides the university with income now and returns any remainder to your heirs.
How it Works
- You give shares of closely held stock to Tufts University.
- Most commonly, Tufts offers the stock back to your company for redemption or repurchase and uses the proceeds for your designated purpose.
Benefits of Gifts of Business Interests
- You receive gift credit and an immediate income tax deduction for the appraised value of your shares.
- You pay no capital gains tax on any appreciation of the shares.
- Under certain conditions, you may be able to use closely held shares to fund a life-income arrangement, such as a "flip" charitable remainder unitrust.
Important Factors to Consider
- Because closely held stock is not publicly traded, a gift of such an asset requires an independent appraisal to establish its fair market value.
- Your charitable deduction will be based on the appraised market value of the shares, less any liabilities you may have accrued.
- All gifts of closely held stock must be approved by the Office of the Treasurer at Tufts.
A Gift of a Business Interest is for You if...
- You are an entrepreneur, member of a family business, or participant in a professional corporation or partnership.
- You hold an ownership interest in a viable enterprise and are able to transfer your interest to a third party such as the university.
- Your interest is not encumbered by debt, and Tufts will not be called on to make future contributions to or for the enterprise.
- You want to save both income and capital gains tax.
- You want to transfer assets to your heirs with minimal tax ramifications.
If you are considering a gift of stock in a business interest, first consult with your attorney and accountant. We can work with you and your advisers to review the benefits of such a gift. The Office of the Treasurer must review and approve any such transfer.
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