Closely Held Stock*

If you hold stock in a closely held business, you may be able to use that stock as a powerful way to support our future.

Closely held stock is most often used to support our work in the form of:

An outright gift. You can make a gift of closely held stock as long as the constituting documentation for the business permits additional owners and it is debt-free. The donation of closely held stock first requires you to value the interest in the business entity.

Review this checklist to see if you may benefit from donating closely held stock. Then, consult your professional legal and tax advisors to see how to maximize the benefits of this tax-efficient strategy for making a difference.

• You are a majority shareholder in a closely held corporation.
• You would like to remove retained earnings from the corporation, without having them taxed again.
• You would like to maintain a controlling position in the corporation’s outstanding stock.
• You would like to avoid capital gains taxes on the shares you donate to The Catholic Foundation.
• You would like to receive a federal income tax deduction for the full appraised value of the gift.
• You would like to support our mission.

A gift in your will or living trust. If you are not ready to make a gift of these assets during your lifetime, consider making a gift of all or a portion of your closely held stock through a gift in your will or living trust.

A charitable gift annuity. Funding a charitable gift annuity with closely held stock not only provides you with fixed payments for life and allows you to support our work, but it can offer numerous financial benefits. You may receive a federal income tax deduction and, if you use appreciated stock, you can eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy. It is possible to contribute stock in either a C or S corporation in exchange for a charitable gift annuity.The contributed shares must be valued by a qualified independent appraisal whenever the deduction exceeds $10,000. The appraisal is required in order to substantiate your federal income tax deduction.

A charitable remainder trust. You may be able to use all or a portion of your closely held stock to fund a charitable remainder trust. If you do, you receive a federal income tax deduction on the appraised value of your gift and you pay no capital gains taxes at the time of the gift. The trust pays you or other named individuals payments every year for life or a term of years. When the trust term ends, the remaining principal goes to The Catholic Foundation as a lump sum. Although a charitable remainder trust with a flip triggering event works well with most business interests, this type of trust cannot be the owner of S Corporation stock.

A charitable lead trust. In certain situations, you can create a charitable lead trust that allows you to pass your closely held stock to your heirs after supporting The Catholic Foundation. The trust makes regular payments to The Catholic Foundation for a period measured by a fixed term of years or the lives of one or more individuals. After the term ends, the remaining assets, including any appreciation, pass to your heirs. A properly designed lead trust will produce an estate or gift tax deduction for the value of that portion of the trust designated for The Catholic Foundation.

* A gift of closely held stock requires special handling, so you should always consult with your legal or tax advisor first.

Next Steps

1. Contact Rebecca Harris at 601-960-8477 or [email protected] for additional information on giving a gift of closely held stock.
2. Seek the advice of your financial or legal advisor.
3. If you include The Catholic Foundation in your plans, please use our legal name and Federal Tax ID.

Legal Name: The Catholic Foundation of the Diocese of Jackson
Address: PO Box 2248, Jackson, MS 39225
Federal Tax ID Number: 23-7355930

Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results.