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Business Interests
The gift that shares your success
You may be holding business or partnership interests that
could bring more benefit to Abington Memorial Hospital Foundation than to you. For example,
you may have invested in a real-estate partnership, or you may hold closely
held stock in a family business. With any gift of a business interest, you
will need to work closely with your advisors. Here are a few ideas about gifting
such interests:
Gifts of closely-held stock
If you own shares in a closely-held business, it may be
advantageous to give some of those shares to AMHF. Why?
As a donor, you receive a charitable income tax deduction for the appraised
value of the shares, even if there is no market for the shares and the original
cost basis of your shares is zero. This can be a significant tax benefit. If
you need additional income, it may be possible to donate your shares to a Charitable
Gift Annuity or a FLIP Unitrust, and receive
a charitable income tax deduction AND income for life or a term of years. If
your company is not paying dividends, this can be a nifty way to convert non-income
producing shares into income producing assets without paying capital gains
tax.
How do you donate closely-held stock? Just give a stock
certificate for the appropriate number of shares to AMHF.
As with gifts of marketable securities, you may need to provide a Stock Power
in a separate envelope (see Gifts of Securities for
instructions). Since there is often no market for resale of such shares, AMHF will
want to present the shares back to your company for repurchase or “redemption” in
exchange for cash. The company can use its retained earnings to redeem the
stock. If the company has excess retained earnings, such a stock redemption
could even help it avoid accumulated earnings tax.
Issues to watch?
You will need to:
- secure a qualified appraisal of your business
and its stock;
- check to make sure there are no restrictions
on the transfer of your stock;
- make sure you do not enter into any prior written
agreement with your company or a potential third-party regarding the re-purchase
of your stock or you could end up liable for capital gains tax; and
- make sure the shares are not subject to a mortgage
or other debt, even if you are not personally liable, because the debt relief
you receive could be taxable. Caution: S-Corp stock may have special considerations
attached to them. Be sure to consult your attorney.
WARNING: Consult your legal and tax advisors before making
any material decisions based on this information.
Send me a Personal Illustration!
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For more information
If you are considering this gift, please complete the personal illustration form so that we can assist you through every step of the process or contact us at:
Abington Memorial Hospital Foundation
1200 Old York Road
Abington, PA 19001
215-481-4019 | Fax: 215-481-4019
E-mail: LegacyGifts@amh.org
*Notice: Consult your legal and tax advisors before making any material decisions based on this information.
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