Mike DiPaolo Archives

VIEWPOINT: How S-Corp stock can benefit charity

Jacob Owens March 7, 2022

Financial advisors often turn to lesser-known financial tools to help their clients achieve their financial goals. One tax-advantaged option for people who are in the process of exiting a business is to make a gift ...

0 Comment 223 Views

News, Viewpoints

Viewpoint: CARES Act offers extra tax advantages for giving this year

Mike Rocheleau October 18, 2020

By Joan Hoge-North & Mike DiPaolo While much of the government funding for coronavirus relief has been focused on helping individuals and businesses, several lesser-known provisions aim to stimulate philanthropy through increased tax incentives around ...

0 Comment 619 Views

Financial advisors often turn to lesser-known financial tools to help their clients achieve their financial goals. One tax-advantaged option for people who are in the process of exiting a business is to make a gift of S-corporation stock. [caption id="attachment_221020" align="alignleft" width="245"]

Mike DiPaolo | PHOTO COURTESY OF DCF[/caption] An S-corporation, or shareholder-led company, is a very specific type of corporate entity. Shareholders not only have a say in the management of the business, but also have the right to receive ownership profits. When a shareholder – or owner – wishes to exit an S-corporation, the remaining owners must buy them out. This presents a tax-advantaged opportunity for the departing shareholder to leverage their assets to make a charitable impact. The Delaware Community Foundation can be a knowledgeable and discrete partner in this process, working with financial advisors and their clients to shepherd a gift of S-corporation stock. Making a gift of S-corporation stock can be a strategic way to significantly reduce capital gains exposure. Following valuation of the stock, the full, fair market value can be claimed as a tax deduction by the shareholder. However, giving away S-corporation stock isn’t as easy as giving away standard, C-corporation stock. That should not deter individuals who wish to turn their dedicated years of service into a generous act. While the process can be complicated and lengthy, the DCF is familiar with the necessary steps, as well as the paperwork and legal processes. Together, with a client’s financial advisor and the DCF’s network of reliable experts, we can ask thoughtful questions to properly navigate the valuation of S-corporation stock and direct philanthropy to a nonprofit organization or cause the client cares about. For those who have worked hard during their lifetimes to establish or help build a private corporation, the decision to transition – by moving on to a new role, stepping back, or retiring – can be an especially emotional one. Financial advisors are incredible allies during such a transition and can offer key insights to clients. The DCF can be another ally. By partnering with the DCF today – or at the right time in the future – financial advisors and their clients may be able to turn S-corporation stock into both tax advantages and a transformational gift to the community. Mike DiPaolo is the vice president for southern Delaware at the Delaware Community Foundation.

Premier Digital Partners

Newsletter Signup

Popular Posts

Type to search

Premier Digital Partners

Newsletter Signup

Popular Posts