some cases, an owner may not be as interested in getting payment for the company
as they are in reducing their tax liabilities and "doing good." In
fact, there are strategies that can be employed that accomplish both of these
Gifting usually occurs when an owner either transfers the business to a charity or to
family or employees. Valuations for this strategy will generally be lower than
most other exit options, as a fair market value approach will be used. This is
the standard used by courts and the IRS for determining the value of a business
Setting up certain types of trusts, such as a Charitable Remainder Trust or a
Grantor-Retained Annuity Trust, which are commonly used in estate planning, can
provide both a philanthropic and financial benefit to a business owner.
These strategies are generally employed by business owners who have achieved a certain
level of wealth outside the business and do not rely on a liquidity event.
Instead they are concentrating on the tax and estate implications of a business
As there are many tax and legal implications involved in a gifting or charity
strategy, it is vital that the attorneys and CPAs that are retained for
developing and implementing this type of program have strong experience in these