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.

Schedule a Meeting

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.

(385) 286-5900

support@uicharitable.org

3507 N University Ave
Suite 125
Provo, UT 84604

©2020-2024 UI Ventures LLC, DBA UI Charitable Advisors. All Rights Reserved.
Portions © 2018-2024 University Impact. All rights reserved.
University Impact is recognized as a tax-exempt public charity as described in Sections
501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code. EIN # 82-1504018

(385) 286-5900

support@uicharitable.org

3507 N University Ave
Suite 125
Provo, UT 84604

©2020-2024 UI Ventures LLC, DBA UI Charitable Advisors. All Rights Reserved.
Portions © 2018-2024 University Impact. All rights reserved.
University Impact is recognized as a tax-exempt public charity as described in Sections
501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code. EIN # 82-1504018

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.