For philanthropically minded business owners, assets that have appreciated in value can be among the most tax-advantaged items to contribute to charity. They enable you to potentially eliminate capital gains tax liability on the sale of the asset, enjoy a current year tax deduction, if you itemize, while allowing the charities you support to receive the most money possible.
Many executives and entrepreneurs find that their most appreciated assets come in the form of non-cash assets (privately held C- and S-Corp stock, limited partnerships or LLC interests), often with a low cost basis and significant current market value, resulting in large capital gains taxes when sold. By donating a portion of these highly appreciated privately held business interests to a public charity (including a donor-advised fund account), they can potentially eliminate capital gains tax liability on the sale and take a full, fair market value income tax deduction, if they itemize.
Do you own an interest in a privately held LLC or limited partnership that may have a future liquidity event? Donating a portion of your interests to SAFE ahead of time
could result in two major benefits:
1. An income tax charitable deduction for the fair market value on the date of contribution.
2. Minimized capital gains tax; capital gains tax generally does not apply to assets donated to charity.
There are many considerations for these types of contributions.
Find out more
about contributing business interests and the process involved.