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.
2 Possible Scenarios:
The family sells the business then uses money from the sale proceeds to give to charity.
The family donates a portion of their ownership stake to a DAF ahead of the sale.