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Closely Held Stock

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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 learn how to benefit from this tax-efficient strategy while 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 International Rescue Committee.
  • 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 provides you with fixed payments for life and allows you to support our work. But it can also offer numerous financial benefits. You will 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. You may contribute stock in either a C or S corporation in exchange for a charitable gift annuity. A qualified independent appraisal must value the contributed shares 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 IRC as a lump sum. This type of trust may not own 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 IRC. The trust makes regular payments to the IRC 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 IRC.

* 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 Bruce Temkin at (212) 551-2947 or bruce.temkin@rescue.org 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 IRC in your plans, please use our legal name and federal tax ID.

Legal Name: International Rescue Committee, Inc.
Address: 122 East 42nd Street, New York, NY 10168-1289
Federal Tax ID Number: 13-5660870

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. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance. A copy of our most recently filed financial report is available from the Charities Registry on the New York State Attorney General’s website (www.charitiesnys.com) or, upon request, by contacting the New York State Attorney General, Charities Bureau, 28 Liberty Street, New York, NY 10005, or us at 122 East 42nd Street, New York, NY 10168-1289. You also may obtain information on charitable organizations from the New York State Office of the Attorney General at www.charitiesnys.com or (212) 416-8401.

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IRC meets all 20 of BBB Wise Giving Alliance’s accountability standards.

CharityWatch

CharityWatch gives the IRC an A+.

Charity Navigator

Charity Navigator gave the IRC its highest rating of four stars.

A charitable bequest is one or two sentences in your will or living trust that leave to International Rescue Committee a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state ZIP], give, devise and bequeath the sum of $________ or ______ percent of my estate to the International Rescue Committee, Inc., a nonprofit institution incorporated in the State of New York with a business address of 122 East 42nd Street, New York, NY 10168-1289 and tax identification number 13-5660870 for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the IRC or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the IRC as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the IRC as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the IRC where you agree to make a gift to the IRC and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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