From real estate to restricted stock: Turn illiquid assets into charitable gifts

Whether you want to simplify your estate or you’re an entrepreneur looking to donate illiquid securities ahead of a business sale, Raymond James Charitable can help. We are well-positioned to handle a gift of illiquid assets to your donor advised fund, helping you maximize your giving.

Some of the non-cash assets we can help turn into charitable dollars include stock of closely held corporations and S corporations, restricted stock, certain stock options, real estate and art. It works like this: When you donate an illiquid asset for benefit to your donor advised fund, you’ll get a receipt for the fair market value of your donation – even if it’s much higher than the original value or cost basis – to assist in preparing your taxes. Our organization will set in motion the steps to liquidate your gift and transfer the proceeds to your fund, where you can use it to make grants.

Here’s a hypothetical example. A business owner is about to sell a privately held company. Before the company is sold, the owner donates $750,000 worth of shares to our charity, for further benefit to a donor advised fund. We facilitate the sale of the shares and the money is deposited in the fund. The owner in this scenario would not pay long-term capital gains on the shares, which had a cost basis of $0. They would receive a charitable deduction, which would come in especially handy during a high income year. Best of all, the full fair market value of their gift would be available for grant-making.

Another benefit of donating an illiquid asset to a donor advised fund is the ability to divide the money from the asset to benefit multiple charities in a sustainable way, instead of giving a windfall to a single charity.

The ability to offer donors flexibility, simplicity and tax savings are a few of the reasons why Raymond James Charitable facilitates gifts of illiquid assets. However, these complex gifts take time to process, so it’s best to plan ahead before the end of the tax year nears.

This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.