Gifting appreciated assets, such as stock or real estate, are a wise option for achieving your charitable goals. These as­sets allow you to avoid capital gains taxes, while receiving a full charitable deduction.

Often overlooked as an appreciated asset, gifting business interest can also provide incredible opportunities. If you are considering selling your business, now or in the near future, it is a time to cele­brate what God has enabled you to build and to enjoy the rewards of your hard work. The sale creates a unique oppor­tunity to invest in your favorite charity, like the IMB. The legacy you have created through your business can be extended into taking the gospel around the world. 

For many business owners, depreciation rules and good tax planning have caused them to have a low adjusted cost basis in the business. This means the wealth generated from the sale creates sub­stantial capital gains taxes. Fortunately, by using charitable giving strategies, you can minimize your taxable income from the sale and simultaneously make a huge kingdom impact. 

If you are interested in gifting a portion of your business, here are five planning considerations: 

1. Plan in advance. Timing is essential when making a gift in conjunction with the sale of a business. If you gift a portion of the business before the sale, you can reduce both income taxes and capital gains taxes. The key is the gift must occur before you reach a legally binding agree­ment to sell the business. 

2. Assess governance structures. Busi­nesses come in all shapes and sizes. They can be structured as sole proprietor­ships, partnerships, LLCs, LLPs, C-corps, or S-corps, each of which has require­ments and procedures for transferring ownership interests. If handled properly, these potential barriers can usually be addressed with a waiver or consent by the other owners. 

3. Obtain an appraisal. For gifts of business interests valued at more than $5,000, you must obtain an independent valuation of the donated interest by a qualified appraiser to substantiate the charitable tax deduction for the gift. The appraisal must occur no earlier than 60 days before the gift and no later than the date you file your income tax return. 

4. Choose your gift vehicle. You can make a gift directly to the IMB or give through a donor advised fund, an endow­ment, a charitable remainder trust, or a charitable lead trust. Depending on your charitable and personal financial goals, the IMB can help you choose the design that works best. 

5. Set charitable goals. Is there a specif­ic project, people group, or geographic region you want to support with the gift? Would you like the gift to be used immediately or spread out over several years? Whatever your preference, the IMB offers great flexibility for you. 

If you have a business and would like to discuss a potential gift, the IMB has a team of advisors and other experts who can explain tax-smart, strategic options to fulfill the dreams the Lord has put in your heart. How incredible it would be to use the blessing the Lord has given you to bless others with knowing Jesus.

Please contact generosity@imb.org for more information on gifting business interest.