Gift Planning Beyond Planned Giving

By Larry Smith, Hamilton County Community Foundation director of development

Gifts of appreciated assets like publicly traded stock, real estate, and privately held business interests are tax-smart strategies to maximize your philanthropic punch. One key strategy on the rise is the donation of privately held business interests, including closely-held C-corporations, partnerships, and limited liability companies. Charitable gifts of closely held business interests provide two key tax benefits:

1. A charitable income tax deduction for the full fair market value of the donated assets; and
2. Avoidance of the capital gains tax that would have been paid had the assets been sold. Hamilton County-based businessman and philanthropist Mike Smith has utilized this strategy to donate closely held business assets to his family’s donor-advised fund that he and his wife Sue had established at Hamilton County Community Foundation.

“Being able to utilize donor-advised fund to accept those privately held business interests was enormously helpful.”

-Mike Smith

There are complex requirements at play for gifts of non-publically traded business interests, and timing can be a critical factor. It is crucial that the business owner donate their interests before there is a signed purchase agreement. Donors must also follow IRS rules regarding appraisal requirements in order to substantiate the tax deduction. In short, you need a charitable partner with the know-how to handle complicated charitable gifts.

If you have questions about charitable gifts of business interests or the other ways charitable gift planning can come into play during your lifetime, please contact Sarah Weaver at

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