Morrison & Foerster LLP: Charities, S Corporations and UBIT: Why a Charitable Gift of S Corporation Stock May Not Be the Best Option

Morrison & Foerster LLP: Charities, S Corporations and UBIT: Why a Charitable Gift of S Corporation Stock May Not Be the Best Option

Not all charitable gifts are created equal, and a charity is not required to accept any and all donations of property, especially property that may be difficult to own or liquidate in furtherance of the charity's purpose.  For instance, before a charity accepts a contribution of stock in an S corporation, it should be aware of the income tax consequences of being a shareholder of an S corporation.  This article summarizes some of the basic tax laws related to charities, S corporations and the unrelated business income tax and suggests that a charity think twice before accepting a charitable gift of S corporation stock.