Albert was the founder and sole shareholder of a small technology company that he started 30 years ago. At 65 years of age, he began thinking about selling the business.
Albert met with his advisors to discuss the company's value and identify potential buyers. Because the company's client base and product offerings had grown significantly over the years, Albert soon realized that the business would sell for a significant sum.
Albert: I knew I had a tax problem. If I sold the business, I would lose much of the value to taxes. I needed enough out of the sale so that my spouse and I could retire comfortably.
One of Albert's advisors recommended that he consider making a gift of some of his stock to his favorite charity. If Albert made the gift prior to the sale of his business, he would avoid capital gains tax on that stock and receive a charitable income tax deduction to further reduce his taxes on the cash he received from the sale.
Albert: I transferred $1 million in stock to the charity and received a $1 million charitable income tax deduction. When the company sold, I was so happy I had listened to my advisor and made the gift.
Albert's tax deduction made it possible for him to preserve his wealth by avoiding the payment of substantial capital gains tax on the sale of his business. As a result, Albert was able to use some of the cash from the sale to purchase a condominium and invest the balance for retirement.
Is a gift of stock right for you?
An outright gift of stock can provide several tax benefits such as generating a charitable tax deduction and avoiding capital gains tax. Please contact us
if you have questions about outright gifts of stock.
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