Dear Professional Advisor,
 
Russ and Carrie, a couple in their early 60s living in Montana, recently sold their closely held business. The offer came quickly and at a price they hadn’t anticipated. Like many entrepreneurs, they accepted — and only afterward fully realized the capital gains exposure created by the sale.

By the time they contacted Yellowstone Foundation, the transaction was complete. There was no opportunity for pre-sale planning with a charitable remainder trust; the gain was already locked in. What they did have, however, was appreciated real estate — including a rental home that had underperformed for years and carried a very low-cost basis.

Their initial instinct was to give the property outright to charity to help offset their tax burden. After reviewing their broader tax picture and long-term goals, however, we determined there was a more strategic option and we structured a Deferred Charitable Gift Annuity (DPGA) funded with the rental property. By incorporating permanent endowment language into the annuity agreement, Russ and Carrie qualified for the valuable Montana Endowment Tax Credit — layering a meaningful state benefit on top of the large federal deduction.

From our first conversation to the signed agreement, the transaction was completed in less than two weeks. An underperforming asset was transformed into a substantial future endowment gift and a strategic response to an unexpected tax burden — without disrupting their liquidity or lifestyle.

Even when pre-sale planning opportunities are missed, meaningful planning options often remain. Appreciated real estate, closely held business interests, and other low-basis assets can frequently be repositioned in ways that align charitable intent with tax efficiency.

If you have clients who have experienced a liquidity event — or who are holding appreciated property that no longer fits their portfolio — I would welcome the opportunity to explore tax-wise charitable strategies with you. Our decades of experience in planned giving administration have supported donors, professionals, and charities from around the country. We are always glad to serve as a technical resource for you and your clients.

Please feel free to call me directly if a planning conversation would be helpful.

Sara Hofer, JD

Chief Planned Giving Officer