Assets Accepted & Tax Considerations
The Foundation may accept the following types of illiquid gifts:
Community Investments Foundation is a subsidiary of Foundation For The Carolinas that accepts gifts of business interests, including non-voting interests, closely-held stock and partnership interests. Click here to learn more.
The Foundation may accept gifts of interests in businesses as follows:
- Non-publicly traded or closely held stocks
The Foundation may accept closely held stock if an acceptable means of converting the stock into liquid assets can be an anticipated within a reasonable time. This may occur through redemption agreements, liquidation or other means.
- Subchapter S Corporation Stock
The Foundation may accept S Corporation stock subject to certain restrictions as determined by the President, the Executive Committee and the Foundation's legal counsel.
- Limited Liability company interests
The Foundation may evaluate membership interests in limited liability companies (LLCs) on a case-by-case basis with particular attention paid to the company's line of business, investments, debt and financing structure. If income or distributions from LLC interests create unrelated business income tax (UBIT), you must make arrangements to pay the UBIT from your Gift Fund or other sources.
General partnership interests
The Foundation does not accept gifts of general partnership interests due to potential unlimited liability.
Limited partnership interests
Such interests are hard to value. The IRS requires an appraisal by an expert in the field when making this type of gift. Acceptance will depend on an assessment of any potential liability to the Foundation and the staff attention required. The Foundation also will consider whether generated partnership income may be treated as unrelated business income subject to UBIT. If the limited partnership interest gift creates UBIT, arrangements must be made to pay the UBIT from your Gift Fund or from other sources.
Family limited partnership interests
The Foundation treats family limited partnership interests like limited partnership interests for gift acceptance purposes.
Community Real Property Holdings is a subsidiary of Foundation For The Carolinas that receives gifts of real property such as land, real estate, tangible property and timber/mineral rights. Click here to learn more.
The Foundation may accept gifts of real estate as follows:
- Assets Related To Real Property
The Foundation may accept mineral and timber rights, valued by Treasury regulations as applied by expert appraisers.
- Tangible Real Property
The Foundation may consider accepting works of art, antiques, vehicles, jewelry or other items of tangible personal property. You should seek your Professional Advisor's advice regarding tax deductions allowable for these contributions and the special requirements for appraisal imposed by the IRS.
- Your deduction is the fair market value of the business interest or the real property on the date you make the contribution if interests are held for more than one year. Your deduction is the lesser of your cost basis or fair market value for assets held a year or less. The IRS requires you to provide an appraisal for any contributed property for which you will claim a deduction of more than $5,000.
- The Foundation will seek to sell these assets promptly and obtain the most favorable sale price. The Foundation frequently will seek your guidance on the method and timing of the sale, but is not obligated to do so.
- Assets other than cash and publicly traded securities are subject to the Foundation's gift acceptance policies and review by the Board of Directors. The qualified appraisal value obtained at the time of your contribution establishes both the value of your Gift Fund and the tax deduction amount until the property is sold.
- The net proceeds of the sale (less any sales expenses and any previous expenses for taxes, service charges or improvements) will be credited to your Gift Fund when the assets are liquidated.
Life Insurance Policies
You make a gift of life insurance to the Foundation either by irrevocably designating the Foundation as the owner and beneficiary of the policy or by designating the Foundation as a beneficiary of all or a portion of its proceeds. Before the Foundation can accept a policy requiring ongoing premiums, you must submit to the Foundation a written agreement outlining your payment plan.
Retirement Plan Assets
Retirement plan assets (those in qualified plans and/or IRAs) are ideal for charitable giving purposes because these assets are most heavily taxed. You make a gift of retirement plan assets by irrevocably designating the Foundation as the beneficiary of the plan.
You can provide for your spouse or other family members by naming the Foundation as the secondary beneficiary of the plan or by establishing a Charitable Remainder Trust with the assets.
Making a gift of retirement account assets during your lifetime could create adverse tax consequences for you. Please check with your tax advisors before making such a designation.
The Foundation will consider gifts of other assets not named here. All such gifts are subject to review and approval by the Foundation.
Estate Planning And Taxes
Contributions and any earnings to your Gift Fund are not part of your taxable estate and are not subject to probate. You should not include amounts contributed to your Gift Fund in your gift and estate tax unified credit calculation.
Tax Treatment Of Gift Fund Investment Earnings And Distributions
Income and capital gains are credited to your Gift Fund and not to you personally. Investment earnings will be reflected in the market value of your Gift Fund. See Investments for an explanation of investment pool descriptions.
You receive a charitable deduction at the time you make a contribution, but cannot continue receiving deductions for ongoing grant distributions from your Gift Fund. Amounts distributed may include appreciation since the date of your gift.
For complete Gift Acceptance Policies and Tax Considerations, refer to the Charitable Giving Guide.