The celebrated philanthropy of Warren Buffet has prompted much interest in contributing to charities. In this article series, learn about setting up a charitable foundation, donating company stock, and navigating the related issues of taxation and securities law. Part 1 emphasizes private foundations, direct stock gifts to charities and donor-advised funds, and the issues involved in transferring stock options or restricted stock.
The charitable remainder trust (CRT) is a mainstay of estate planning. Although designed for charitable giving, CRTs can play a role in financial planning for your stock grants.
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After you die, taxes may be owed on the value of your property. One pillar of estate planning is to transfer assets that are likely to appreciate in value, such as stock options, out of your control long before you die.
Restrictions can apply when you are funding a CRT with your company stock. These considerations dictate whether your strategy makes sense or is even possible.
In this article we discuss the use of CRTs to diversify your company stock holdings, without immediate income tax liability, while you support an institution or cause you believe in.
The grantor-retained annuity trust (GRAT) is one of the best techniques currently available for transferring company stock or other investable assets to family members with little or no estate or gift tax cost. However, legislative changes proposed by the Obama administration would have an adverse impact on this. Learn about the GRAT technique before the tax rules change.
The celebrated philanthropy of Warren Buffet has prompted much interest in contributing to charities. In Part 2 of this article series, learn about the taxation and securities law associated with donations of company stock to charities and private foundations.
You can take advantage of the current gift, estate, and generation-skipping transfer tax regimes. Transfer tax-free large holdings of company stock out of your estate by using gifts and trusts.
Tax planning for retirees can be more challenging that it was during their working years. You need to constantly monitor any options and company stock holdings as part of your overall portfolio. Part 3 looks at special issues that can arise after you retire, including Social Security; coordinating with required minimum distributions for IRAs and your 401(k); moving to another state; and the gifting of stock.