Converting Tax Dollars to Charitable Dollars
When selling a business, you should consider a strategy that maximizes the sales proceeds by reducing the tax consequences of the sale. One way to reduce taxes from the sale of a business is to make a gift to a charity like ours.
How Can a Gift of Your Business Benefits You?
- When you make a gift of a portion of your business interest to us, you can benefit in the following ways:
- You will often avoid substantial capital gains taxes on what you give to charity.
- You will receive a charitable income tax deduction for your gift.
- You can use the tax savings from your charitable gift to offset the tax on the cash you receive from the sale.
- You will preserve wealth, which you can use to reinvest for retirement and other needs.
- You will transfer what would otherwise be “tax dollars” to support our cause.
What Type of Business Do You Own?
Several different business and tax structures include sole proprietorships, partnerships, limited liability companies, Subchapter S corporations (S corps), and Subchapter C corporations (C corps). Don’t hesitate to contact us to discuss your type of business and how a charitable gift may benefit you.
How Does a Gift of a Business Interest Work?
- Before agreeing to sell your business, you give us a portion of your shares.
- A buyer then purchases the shares from you, the other shareholders, and our organization.
- You receive cash from the sale of your shares and tax benefits for the gift you made.
Additional Considerations
Life Income Plan. It is possible to sell your business interest tax-free through a charitable remainder trust and receive lifetime income. Contact us for a free illustration of this plan.
Donor-Advised Funds. You may also want to consider transferring your business interest to a donor-advised fund (DAF). You can then use your fund like a mini-foundation to make gifts to all important causes. Contact us to learn more.