Gifts of Business Interests

If you own shares in a closely held business, it may be advantageous to give some of those shares to The Hotchkiss School. You will receive a charitable income tax deduction for the market value of the shares, and will pay no capital gains tax on the transfer to us, even if your cost basis in the shares is zero. It may be possible to use the shares to fund a charitable remainder unitrust paying lifetime income to you, or a charitable lead trust to lower the tax cost of passing a family business to the next generation.

The Hotchkiss School will receive dividends from the stock, or will offer it to the corporation for redemption or repurchase.

Checklist

  • Before making your gift, make sure that there are no restrictions on the transferability of the stock, and that the shares are not subject to debt or other corporate liability.
  • Since closely held stock doesn't trade publicly, you will need to secure an independent appraisal to establish the fair market value of the shares you donate.
  • Consult with your attorney, accountant and business partners before proceeding.
  • For our part, The Hotchkiss School will first review the marketability and transferability issues before we agree to accept the stock.

More

To learn more about gifts of business interests, Email us, complete the Information Request Form, or call us at (860) 435-3263 so that we can assist you.