Thanks, John. I am indeed working through this with my colleagues in Finance.
Does the fact that the school was required to hold the shares until a liquidity event represent a condition on the gift that affects the date of valuation?
Best,
Mark Jorgensen
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Mark Jorgensen
Kent Place School
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Original Message:
Sent: 11-25-2024 11:30 AM
From: John Taylor
Subject: Recording a Gift of Stock in a Privately Held Company
Huh. Well, the gift should have been appraised (or value certified by a CPA) at the time of the gift. A gift should have been recorded at that time for that amount. You have now owned the gift for five years so any sale would require recording an investment gain or loss.
How did your CFO handle the entry on the General Ledger five years ago? You should coordinate with them. You really cannot record a gift of the purchase amount today, as you need to account for that gain or loss.
In the interest of transparency, I'd work with the CFO to determine the gift value when it was made and record that value as a gift. If you are in a campaign now but were not in a campaign when the gift was given, you should not include this in the campaign.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
2604 Sevier Street
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Serving the Advancement Community Since 1987
Original Message:
Sent: 11/25/2024 12:25:00 PM
From: Mark Jorgensen
Subject: Recording a Gift of Stock in a Privately Held Company
Hello all,
A donor gave my organization shares of stock in a privately held company almost five years ago. The transfer agreement stipulated that the shares would be held by the school until the time of a liquidity event. No gift was recorded by the school at the time of the transfer. The liquidity event just happened now, resulting in the school's shares being bought out by the acquiring company. How would you record this gift?
Thanks,
Mark Jorgensen
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Mark Jorgensen
Kent Place School
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