A business owner who contributes closely held stock to Beloit College will be allowed a charitable deduction for the fair-market value of the stock. An additional benefit is that the donor will escape the potential capital-gain tax on any appreciation in the value of the stock.

Subsequent to the gift, the corporation could purchase the stock from Beloit College for cash. This not only enables the donor to retain complete control over the company but also makes cash available to Beloit College for its current needs. As long as Beloit College is not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.