Donating Complex
Assets
Donating Complex Assets
This is a tax efficient strategy that leverages a Donor-Advised Fund to reduce taxable income, potentially avoiding capital gains tax and leaving clients with more money to support causes they care about.
This is a tax efficient strategy that leverages a Donor-Advised Fund to reduce taxable income, potentially avoiding capital gains tax and leaving clients with more money to support causes they care about.
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OUR PROCESS
How it Works
How it Works
OUR PROCESS
Our team of experts will guide the advisor and the donor through the process for a seamless experience.
Our team of experts will guide the advisor and the donor through the process for a seamless experience.
1
Donate
Ownership of all or a portion of the
asset is transferred to UI through a
Gift Agreement.
2
Sale
When the donated asset is sold, the
pro rata portion of the sale proceeds
funds the charitable vehicle, often a
Donor-Advised Fund.
3
Gifts
The donor can then recommend grants
from the charitable fund to support
causes they care about.
01
Eliminates Capital Gains
Eliminates Capital Gains
Eliminates capital gains taxes on the portion of the asset that is donated.
02
Tax Deduction
Tax Deduction
Qualifies for an immediate personal income tax deduction for the fair market value of the asset.
WHY DONATE?
Tax Benefits of Donating
Complex Assets
01
Eliminates Capital Gains
Eliminates capital gains taxes on the portion of the asset that is donated.
02
Tax Deduction
Qualifies for an immediate personal income tax deduction for the fair market value of the asset.
CASE STUDY
CASE STUDY
Donating Complex Assets
Donating Complex Assets
Donating Complex
Assets
A family that wants to be charitably active in retirement is selling their debt-free business for $10 million. Their taxes include a 20% capital gains tax and a 7% state tax, totaling 27%. Their financial advisor suggests donating $2 million of the equity into their DAF to help accomplish their philanthropic goals.
A family that wants to be charitably active in retirement is selling their debt-free business for $10 million. Their taxes include a 20% capital gains tax and a 7% state tax, totaling 27%. Their financial advisor suggests donating $2 million of the equity into their DAF to help accomplish their philanthropic goals.
A family that wants to be charitably active in retirement is selling their debt-free business for $10 million. Their taxes include a 20% capital gains tax and a 7% state tax, totaling 27%. Their financial advisor suggests donating $2 million of the equity into their DAF to help accomplish their philanthropic goals.
Donation After Sale
Donation Before Sale
Sale Price
$10,000,000
$10,000,000
Donation Prior to Sale
$0
$2,000,000
Cost Basis
$100,000
$100,000
Taxable Amount
$9,900,000
$7,900,000
Taxes
$2,673,000
$2,133,000
After Tax Equity
$7,327,000
$5,867,000
Donation After Sale
$2,000,000
$0
Final Equity
$5,327,000
$5,867,000
Gift Tax Deduction
$2,000,000
$2,000,000
Income Tax Savings @44% TB
$880,000
$880,000
Final Equity Plus Tax Savings
$6,207,000
$6,747,000
Donation After Sale
Donation Before Sale
Sale Price
$10,000,000
$10,000,000
Donation Prior to Sale
$0
$2,000,000
Cost Basis
$100,000
$100,000
Taxable Amount
$9,900,000
$7,900,000
Taxes
$2,673,000
$2,133,000
After Tax Equity
$7,327,000
$5,867,000
Donation After
Sale
$2,000,000
$0
Final Equity
$5,327,000
$5,867,000
Gift Tax Deduction
$2,000,000
$2,000,000
Income Tax Savings @44% TB
$880,000
$880,000
Final Equity Plus Tax Savings
$6,207,000
$6,747,000
Takeaways
Takeaways
Takeaways
Tax Deduction
Tax Deduction
The family qualifies for an immediate tax deduction based on the fair market value of the portion of
the business that was donated.
The family qualifies for an immediate tax deduction based on the fair market
value of the portion of the business that was donated
The family qualifies for an immediate tax
deduction based on the fair market value of the
portion of the business that was donated
Eliminates Capital Gains Tax
Eliminates Capital Gains Tax
The family eliminates the capital gain tax on the portion of the business donated by transferring the
equity into their UI DAF before selling it.
The family eliminates the capital gain tax on the 2 million by transferring the
equity into their UI DAF before selling it.
The family eliminates the capital gain tax on
the 2 million by transferring the equity into
their UI DAF before selling it.
$540,000 In Savings
$540,000 In Savings
The $2 million donation to the Donor-Advised Fund made prior to the sale saved the family
$540,000 net.
After taxes, the 2 million donation placed in the DAF prior to the sale saved
them $540,000 net.
After taxes, the 2 million donation placed in the
DAF prior to the sale saved them $540,000 net.
Tax Free Growth
Tax Free Growth
Additional gains after the donation grow tax free in the DAF.
Additional gains after the donation grow tax
free in the DAF.
Donating Complex
Assets
A Tax efficient strategy that leverages DAFs to reduce taxable income while leaving clients with more money to support causes they care about
Tax Benefits of Donating
Complex Assets
WHY DONATE?
1
Donate
Ownership of all or a portion of the asset
is transferred to UI through a Gift
Agreement.
2
Sale
When the donated asset is sold, the pro
rata portion of the sale proceeds funds the charitable vehicle, often a Donor-Advised Fund.
3
Grant
The donor can then recommend grants
from the charitable fund to support
causes they care about.
01
Eliminates Capital Gains
Eliminates capital gains taxes on the portion of the asset that is donated.
02
Tax Deduction
Qualifies for an immediate personal income tax deduction for the fair market value of the asset.
Tax Benefits of
Donating Complex
Assets
WHY DONATE?
How it Works
OUR PROCESS
Our team of experts will guide the advisor and the donor through the process for a seamless experience.