If you hold stock in a closely held business, you may be able to use that stock as a powerful way to support our future.
Closely held stock is most often used to support K-State in the form of:*
An outright gift. You can make a gift of closely held stock as long as the constituting documentation for the business permits additional owners and it is debt-free. The donation of closely held stock first requires you to value the interest in the business entity.
Review this checklist to see if you may benefit from donating closely held stock. Then, consult your professional legal and tax advisors to see how to maximize the benefits of this tax-efficient strategy for making a difference.
A gift in your will or living trust. If you are not ready to make a gift of these assets during your lifetime, consider making a gift of all or a portion of your closely held stock through a bequest in your will or living trust. If your estate is worth more than the current exemption amount, you will receive a federal estate tax charitable deduction for the value of your gift.
A charitable gift annuity. Funding a charitable gift annuity with closely held stock not only provides you with fixed payments for life and allows you to support K-State, but it can offer numerous financial benefits. You will receive a federal income tax deduction and, if you use appreciated stock, you can eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy. It is possible to contribute stock in either a C or S corporation in exchange for a charitable gift annuity.The contributed shares must be valued by a qualified independent appraisal whenever the deduction exceeds $10,000. The appraisal is required in order to substantiate your federal income tax deduction.
A charitable trust. You may be able use your closely held stock to fund either a charitable remainder trust or a charitable lead trust. You can create a charitable remainder trust and gift all or a portion of your closely held stock to the trust. If you do this, you receive an income tax deduction for your gift, and there is no immediate capital gain on the portion gifted to the trust. The trust pays you or other named individuals payments every year for life or a term of years. When the trust terminates, the remaining principal goes to the KSU Foundation as a lump sum. Although a charitable remainder trust with a flip triggering event works well with most business interests, this type of trust cannot be the owner of S Corporation stock.
In certain situations, you can create a charitable lead trust, which allows you to pass your closely held stock to your heirs after supporting K-State now. The trust makes annual gifts to our organization for a period of time. After the trust terminates, the closely held stock passes to your heirs.
*A gift of closely held stock requires special handling, so you should always consult with your legal or tax advisor first.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
A charitable bequest is one or two sentences in your will or living trust that leave to the KSU Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.
an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan
"I, [name], of [city, state, ZIP], give, devise and bequeath to the KSU Foundation [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."
able to be changed or cancelled
A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.
cannot be changed or cancelled
tax on gifts generally paid by the person making the gift rather than the recipient
the original value of an asset, such as stock, before its appreciation or depreciation
the growth in value of an asset like stock or real estate since the original purchase
the price a willing buyer and willing seller can agree on
The person receiving the gift annuity payments.
the part of an estate left after debts, taxes and specific bequests have been paid
a written and properly witnessed legal change to a will
the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will
A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to K-State or other charities. You cannot direct the gifts.
An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.
Tax on the growth in value of an asset — such as real estate or stock — since its original purchase.
Securities, real estate, or any other property having a fair market value greater than its original purchase price.
Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.
A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.
You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.
You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to K-State as a lump sum.
You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to K-State as a lump sum.
A beneficiary designation clearly identifies how specific assets will be distributed after your death.
A charitable gift annuity involves a simple contract between you and K-State where you agree to make a gift to K-State and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.