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CLOSELY HELD STOCK
BENEFIT FROM YOUR PHILANTHROPY
People who own sizable blocks of stock in closely
held corporations are strategically positioned to
create unique planning benefits. When a majority
shareholder would like to get retained earnings out
of the corporation, use them for a philanthropic
purpose without having them taxed again, and still
maintain a control position in the corporation’s
outstanding stock, there is a way to do so.
To accomplish the objectives, the shareholder
gives some of his or her stock to a favorite
organization, such as Jesuit (but not so much
so as to reduce ownership to 50 percent or
less). Jesuit can then sell the stock back to the
corporation, which uses its retained earnings to
purchase the shares. (The IRS, however, says there
can be no prearranged contract or agreement
for the organization to sell the stock or for the
corporation to buy it.)
Benefits
Eliminate capital
gains taxes.
Qualify for an
income tax
deduction.
Maintain control of
the corporation.
Finding God in all things