Closely Held Business Stock
A business owner who contributes closely held stock to Georgia Tech will be allowed a charitable deduction for the fair-market value of the stock. An additional benefit is that the donor will escape the potential capital-gain tax on any appreciation in the value of the stock.
Subsequent to the gift, the corporation could purchase the stock from Georgia Tech for cash. This not only enables the donor to retain complete control over the company but also makes cash available to Georgia Tech for its current needs. As long as Georgia Tech is not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.
Please note: The federal estate tax is currently back in effect through the end of 2012. The top tax rate is now 35%, and the exclusion amount is $5,120,000 per person and $10,240,000 per married couple. Any exclusion amount not used by a spouse who dies after December 31, 2010, is portable and generally may be used by the surviving spouse. It is very important that you seek the advice of your estate-planning attorney to determine what changes, if any, need to be made to your existing estate plans.