OHSU

Case Study

Consider this hypothetical example of how a donation of closely held stock can make a significant impact on our work, while providing the donor benefits as well.

The following is an illustration of how this type of donation works.

Phil owns virtually all of the stock in a company he founded as a young entrepreneur. Its current valuation is $2 million. Phil's cost basis is zero because his original investment has long since been written off for tax purposes.

The corporation has $200,000 in retained earnings, and Phil is concerned that the IRS may question the retention of this amount and decide to impose a second tax on it. Moreover, he has wanted to make a major contribution to us. So, Phil gives us $200,000 worth of his stock, and both he and OHSU Foundation accomplish their goals.

Phil's Tax Benefits
  • Phil receives an income tax deduction of $200,000. He avoids federal taxes on the capital gain, plus possible taxes at the state level, too.
  • His corporation solves its potential retained earnings problem, including a potential federal penalty tax on accumulated earnings.
  • Phil retains full control of his company.
  • OHSU Foundation receives $200,000 once the stock is redeemed.

To learn more about supporting our organization today with a gift of closely held stock, contact Office of Gift Planning at Toll Free 800-462-6608 or 503-228-1730 or pginfo@ohsu.edu.