Business Interests

Ownership in closely-held businesses

Limited Liability Company | Sub-chapter S Corporation | Closely Held Stock

Giving Ownership Interests in Private Companies

Whether you have ownership in a Limited Partnership, Limited Liability Corporation, Sub-chapter S Corporation or other privately held company, you can redirect all or part of the value of that ownership into reaching Asia for Christ.

Giving a business interest directly to a tax-exempt organization such as Gospel for Asia typically allows you to avoid capital gains taxes as well as receive a charitable deduction for the appraised fair market value of the gift.

Through our partnership with Servant Christian Community Foundation (SCCF), we can help you evaluate the potential of making a gift of this type, and assist in the transfer, management and sale of the gifted asset.

Certain types of business interests (such as Subchapter S Corporations) would have tax implications if given directly to GFA, but through our partnership with SCCF, we can accept these gifts. Giving business interests lowers the taxes due, thereby creating more funds ultimately available for ministry use.

An Example:

Jonathan Smith began his company shortly after World War II with $500 in borrowed funds. Today, the company is worth $10 million. It is Jonathan's habit to give tithes and gifts equal to 20 percent of his income. Therefore, he wishes to give $2 million to Gospel for Asia to support the work of native missionaries upon the sale of his business.

If he makes his charitable gift after he sells his business, he must pay capital gains tax of approximately 15 percent. In order to give $2 million to GFA, he would use approximately $2.5 million of his stock value, paying the government approximately $419,000 in tax.

If he gives Gospel for Asia's Harvest Foundation 20 percent of his company prior to the sale, and allows GFA (through our partnership with Servant Christian Community Foundation) to sell that portion of his company to the buyer of his business, there will be no tax owed on the $2 million. Thus, Jonathan can give $419,000 more to spread the Gospel throughout Asia.

For more information:

If you have any questions or wish to start the process for your gift, please fill out the contact form, or call Gospel for Asia's Harvest Foundation at 1-800-WIN-ASIA (1-800-946-2742).

DISCLAIMER:This information is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It is always a good idea to seek legal and tax advice from your professional advisor(s).

[top of page]

Giving Interests in Limited Liability Companies

Gifts of interests in limited liability companies allow you another great opportunity to further God's work through Gospel for Asia. The tax benefits of gifting these assets before a sale is made-rather than selling the asset, paying the tax, and donating the net proceeds-can be enormous. Not only do you avoid the tax on the sale, but you also get a sizeable charitable deduction, which saves you even more taxes.

Here's how it works:

As you and your advisor decide that a gift of a business interest is appropriate in your financial and philanthropic planning, submit the following documents to Servant Christian Community Foundation (SCCF), Gospel for Asia's partner in administering the Gospel for Asia Harvest Foundation:

Copies of articles of organization and any amendments
Fully executed copy of the operating agreement, and any amendments
Copies of any documents evidencing the withdrawal of member or admission of new members
List showing the number of units or percent of membership interest of all members and the current capital account balances of each member
Current audited financial statement
Current valuation
Giving fund agreement
Liquidation/marketing plan information
Historical distribution/earnings information such as previous years K-1

The above items allow SCCF to understand the asset and answer relevant questions, such as, "Is the asset transferable?" and "What is the wisest method of transfer?" SCCF reviews the gift and submits a gift offer letter to you as owner. As the decision is made to proceed, a transfer document is drawn up, either by SCCF or your legal counsel.

As the transfer document is executed, the gift date is established. There may be additional items, such as an appraisal and Form 8283, which will need to be completed after the gift has taken place.

SCCF will then work towards the sale or the ongoing management of the asset as appropriate. When the asset is sold, the funds received, less the costs associated, will be placed in the Harvest Fund.

What makes your asset an appropriate gift? The asset . . .

has been held by you longer than one year,
has appreciated in value, and
is transferable (not under contractual obligation or other agreement with someone else)

What else do I need to know?

An appraisal may be needed in order to substantiate the value of your tax deduction. You are responsible for securing this.
When the asset is sold, SCCF retains a portion of sale proceeds to support their ministry work.
After the sale, SCCF places between 92 to 98 percent of the net proceeds into the Harvest Foundation for distribution according to your designations.

For more information:

If you have any questions or wish to start the process for your gift, please fill out the contact form, or call Gospel for Asia's Harvest Foundation at 1-800-WIN-ASIA (1-800-946-2742).

[top of page]

Giving Sub-chapter S Corporation Stock

Gifts of appreciated holdings will allow you a greater opportunity to help share the Good News through Gospel for Asia. The tax benefits of giving rather than selling the asset (or retaining it in your name) can be significant. These include (a) avoiding personally paying current income taxes on the income of the Sub S Corporation, and (b) receiving a deduction of the fair market value of the gift.

Here's how it works:

As you and your advisor decide that a gift of stock is appropriate in your financial and philanthropic planning, submit the following documents to Servant Christian Community Foundation (SCCF), Gospel for Asia's partner in administering the Gospel for Asia Harvest Foundation:

Articles of incorporation and amendments
Current bylaws
Listing of authorized shares and listing of shareholders
Shareholder's agreement and amendments
Audited financial statements to include balance sheet and corporate tax return
Current valuation and adjusted tax basis
Liquidation/marketing plan information
Questionnaire (provided by NCF)
Stewardship fund agreement
Any agreements restricting shares
Historical K-1's

The above items allow SCCF to understand the asset and answer relevant questions, such as, "Is the asset transferable?" and "What is the wisest method of transfer?" NCF reviews the gift and submits a gift offer letter to you as owner. As the decision is made to proceed, a transfer document is drawn up, either by SCCF or your legal counsel.
As the transfer document is executed, the gift date is established. There may be additional items, such as an appraisal and Form 8283, which will need to be completed after the gift has taken place.
SCCF will then work towards the sale or the ongoing management of the asset as appropriate. When the asset is sold, the funds received (less the costs associated) will be placed in the Harvest Foundation and used according to your designation(s).

What makes your asset an appropriate gift? The asset . . .

has been held by you longer than one year,
has appreciated in value, and
is transferable (not under contractual obligation or other agreement with someone else)

What else do I need to know?

An appraisal may be needed in order to substantiate the value of your tax deduction. You are responsible for securing this.
When the asset is sold, SCCF retains a portion of sale proceeds to support their ministry work.
At sale, SCCF places between 92 to 98 percent of the net proceeds into the Gospel for Asia Harvest Foundation for distribution according to your designation(s).
Quarterly income distributions, net of costs of administration and net of estimated Unrelated Business Income Tax will be placed into the Harvest Foundation as well.

For more information:

If you have any questions or wish to start the process for your gift, please fill out the contact form, or call Gospel for Asia's Harvest Foundation at 1-800-WIN-ASIA (1-800-946-2742).

DISCLAIMER: This information is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It's always a good idea to seek legal and tax advice from your professional advisor(s).

[top of page]

Giving Closely Held Stock

Gifts of appreciated holdings will allow you a greater opportunity to help fulfill the Great Commission through Gospel for Asia. The tax benefits of giving rather than selling the asset (or retaining it in your name) can be significant-such as avoiding any gain on sale, and receiving a tax deduction of the fair market value of your gift.

Here's how it works:

As you and your advisor decide that a gift of an interest in closely held stock is appropriate in your financial and philanthropic planning, submit the following documents to Servant Christian Community Foundation (SCCF), Gospel for Asia's partner in administering our Gospel for Asia Harvest Foundation:

Articles of incorporation and amendments
Current bylaws
Listing of authorized shares and shareholders
Shareholder's agreement and amendments
Any agreements restricting shares
Audited financial statements
Current valuation
The form of ownership
Giving fund application
Liquidation/marketing plan information

The above items allow SCCF to understand the asset and answer relevant questions, such as, "Is the asset transferable?" and "What is the wisest method of transfer?" SCCF reviews the gift and submits a gift offer letter to you as owner. As the decision is made to proceed, a transfer document is drawn up, either by SCCF or your legal counsel.
As the transfer document is executed, the gift date is established. There may be additional items, such as an appraisal and Form 8283, which will need to be completed after the gift has taken place.
SCCF will then work towards the sale or the ongoing management of the asset as appropriate. When the asset is sold, the funds received, less the costs associated, will be placed in the Harvest Foundation and used according to your designation(s).

What makes your asset an appropriate gift? The asset . . .

has been held by you longer than one year,
has appreciated in value, and
is transferable (not under contractual obligation or other agreement with someone else)

What else do I need to know?

An appraisal may be needed in order to substantiate the value of your tax deduction.
SCCF requests that a portion of the value of the investment be retained by SCCF to cover their costs associated with acquiring, managing and liquidating the gift.
When the asset is sold, SCCF retains a portion of the proceeds to support their ministry work.
At sale, SCCF places between 92 to 98 percent of the net proceeds into the Gospel for Asia Harvest Foundation for distribution according to your designations.
From time to time, GFA may direct SCCF to hold some or all of the shares. Quarterly income distributions, net of costs of administration, will be placed into the Harvest Foundation until they are sold.

For more information:

If you have any questions or wish to start the process for your gift, please fill out the contact form, or call Gospel for Asia's Harvest Foundation at 1-800-WIN-ASIA (1-800-946-2742).

[top of page]