A business owner who contributes closely held stock to HUC-JIR will be allowed a charitable deduction for the fair-market value of the stock. An additional benefit is that the donor will escape the potential capital-gain tax on any appreciation in the value of the stock.
Subsequent to the gift, the corporation could purchase the stock from HUC-JIR for cash. This not only enables the donor to retain complete control over the company but also makes cash available to HUC-JIR for its current needs. As long as HUC-JIR is not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.
