A successful business owner built a business from scratch over 20+ years into a $100+ million revenue business. Ready to retire, he sold the company to a strategic buyer in an all-cash deal. In his generosity, he shared millions of dollars of the sale proceeds with the employees as special bonuses and made a multi-million dollar gift of stock prior to the sale to a favorite charitable organization. His CPA referred us for the valuation to determine his tax deduction because he knew we are experts in this type of valuation – one that would need to stand up to the scrutiny of the IRS.
Because the gift was made in the later stages of the sale process, when the ultimate sale price was already known, reconciling the valuation with the sale price was a key challenge. Since any sale is uncertain until it finally closes, the value of the stock must be discounted from the sale price prior to closing. Failure to get this right exposes the donor to an IRS challenge.
While these types of large stock gifts are relatively rare, we have been involved in several in recent years. As a result, we were able to draw on our experience with other similar transactions to effectively address the technical challenges of the project and allow the client to meet the tax filing deadline.
We were proud to support the business owner and his family in their tradition of philanthropy. The client was pleased we were able to accomplish this efficiently and effectively in support of their charitable goals for the community, and he appreciated our extensive experience in similar situations, including work with other donors to the same charity.
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