P. 1
Donating Private Stock

Donating Private Stock

|Views: 92|Likes:
Published by Sanjay Gandhi

More info:

Published by: Sanjay Gandhi on Oct 21, 2010
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less





The benefits of private stock donations

Deducting the value of illiquid common stock
Real World Recommendations from Experts in the Field

Roebling Partners   dlipa@roeblingpartners. . a solicitation or legal advice.com   646-758-6232 x701   David Lipa   Principal. Roebling Partners   sgandhi@roeblingpartners. Accordingly. you should not act or rely on any information in this presentation without seeking the advice of an attorney licensed to practice law in your jurisdiction. complete or up-to-date.com   646-758-6232 x700 These materials and the information contained in this presentation are provided for informational purposes only and they do not constitute advertising. The materials are not represented to be correct. The materials contained in this presentation do not create and are not intended to create an attorney-client relationship between you and Roebling Partners.Contact Information and Disclaimer   Sanjay Gandhi   President.

Benefits to Donors   Support a charitable cause   Receive substantial cash savings from reduced taxes   A form of Partial Liquidity for illiquid stock   Recognition with charity and community as a major donor   Entire process handled by Roebling – simple. cost effective and rewarding Is donating private stock a common and accepted donation practice? Answer: Large institutions including Stanford and Harvard have been accepting private stock donations for years. . fast.

Sample Tax Savings Calculation   Assumptions:   Donor has gross income of $300k per year for six years and $1 million Fair Market Value in private stock   Appreciated stock is limited to a 30% annual deduction from gross income Simplified Scenario Est.000 $540.000 over 6 years .000 45% $243. Gross Income Over 6 Years Maximum Deduction (30%) Marginal Tax Rate Total Tax Savings $1.000   The donor saves $243.800.

html) . the donation must be accompanied by and independent appraisal   You can use your company’s 409A but the appraiser must sign off on your form 8283   For specifics.Tax Rules for Private Stock Donations   Appreciated stock donations (value above investment) allow for a deduction up to 30% of a donor’s annual adjusted gross income   Stock donations with a basis allow for a deduction up to 50% of a donor’s annual adjusted gross income – IRC election 170B (requires modeling to determine if worthwhile)   Donations must be to IRS recognized charities   Deductions are against ordinary income   Deductions beyond annual limit carry forward for 5 years   Approximate tax savings equal an individual’s marginal tax rate (federal + state) multiplied by the value of securities donated   To qualify for a deduction.irs. see the IRS Bulletin on Noncash Charitable Contributions (http:// www.gov/irb/2006-46_IRB/ar13.

000.000$50. legal. transfer agent)   Require tax expert to confirm tax savings and optimize donation amount   Appraisal required for noncash donations over $10.Why You May Not Have Heard About This   Private security donations have languished despite enormous private company wealth because:   Very few charities accept private stock donations   Lack resources and expertise to screen. counsel and transfer agent   Donors lack the time and resources to navigate a complex private stock donation process   Unable to locate an acceptable charity that also takes illiquid stock   Lack time to facilitate internal transfer process (accounting. board.000+) . excluding public stock   Outside valuation firms have historically been very expensive ($25. manage and value private securities   Unable to respond to a donor’s accountant.

How we add value   Roebling works with a select group of IRS-recognized charities that share the following traits:   Accept private security donations   Strong values and reputation in the community   Clear objectives and efficient use of proceeds   Experienced management   We provide a detailed valuation report and manage the entire donation process   The fee typically represents a small percentage of the savings achieved by the donation   We can tie this into other compliance valuations (e.g. IRC 409A) Do I need to get board approval for my donation? Answer: Getting board approval should be straightforward since donors’ private holdings are being used as part of a charitable donation. . not for cash sale.

Contact Information Roebling Partners 445 Park Avenue.com Sanjay Gandhi. litigation support. Suite 1000 New York. mergers and acquisition support.com dlipa@roeblingpartners. President David Lipa. dispute resolution and portfolio valuation.Conclusion Roebling Partners provides valuation and advisory services to leading private emerging growth companies and investors. Our experienced professionals assist clients with regulatory compliance. Principal sgandhi@roeblingpartners.com . New York 10022 Phone (646) 758-6232 information@roeblingpartners. charitable donations of private stock.

life sciences. McGill University and the University of New South Wales. . University of Oxford. a a non-profit that brings critical technologies to developing countries. social media. Undergrad: Finance and Economics   Admitted: NY Bar (2001).Profiles Sanjay Gandhi. President   Sanjay has worked on valuation and regulatory engagements across ecommerce. Tax and Business Law committees.   Boards: Advisory Board for Business & Ethics (Wharton/UPenn). online marketing and financial services. mobile applications.   Wealth of experience in operating and advisory roles to companies and investors over the past 15 years   Advised Fortune 500 clients on M&A and strategy at McKinsey & Company   Practiced corporate and securities law with leading international law firms   Built a venture investing program for the United Nations across Africa and Asia   Masters of Law. Law. Kopernik.

MobiTV.   Placed late stage private stock with accredited purchasers (secondary direct sales) from companies like Facebook.   Valued portfolios of private equity & venture capital assets   Industrial and Financial Engineering.   Assembled 2 funds of >60 companies where founders swapped common stock with each other to diversify.   Set up private stock donation programs for X PRIZE.   Previously with Pantheon Ventures.   Set valuations on all stock that went into the funds. Principal   Formerly vice president at EBX. the first startup exchange fund. >$30 billion under management. other charities. 3rd largest private equity secondaries player.Profiles David Lipa. LinkedIn. Stanford University .

Roebling Partners: Select Clients .

roeblingpartners.More Information Additional resources are available at: http://www.com .

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->