LLC Wrapper

I got hold of Alanna Linden at The Christian Foundation of the Triangle (CFT; in Raleigh, NC–thus the reference to “the Triangle“) yesterday. I asked her if they were still doing LLC Wrappers (since information about them seemed so sparse; the lone Google reference was merely an announcement of the impending release of the concept a couple of years ago). She assured me LLC Wrappers are alive and kicking.

Today she sent me a two-page summary of what an LLC Wrapper is all about.

First, a “case study” from Greenville, SC:

The Case:

Ken Green, along with his business partner, had built a successful business supply business in South Carolina. The company organized as a limited partnership had grown tremendously during the past 15 years and both partners were feeling led to give more to Kingdom work. They had two goals which they shared with their local Christian foundation president.

Is there a way to move more of the corporate profits to Kingdom work?
Personally, how can I lessen my tax burden and put more into charitable work?

The Solution:

Ken assigned a 10% interest in the company to his new Limited Liability Company, provided to him by The National Christian Foundation (NCF). Then,

Ken gave the 100% membership interest to his Giving Fund at The Christian Foundation of the Triangle (CFT).

In exchange,

[Ken] received a tax receipt for the fair market value of his gifted interest. This allows Ken to reduce his Federal income tax by up to 30% of his adjusted gross income this year. In Ken’s tax situation, this amounts to a tax savings of over $200,000.

Secondly, Ken, as manager of the LLC, continues to manage (along with his business partner) the company.

And finally,

As profits are distributed to the owners, 10% of the income from operations is allocated to Ken’s Giving Fund at CFT. Due to favorable tax rules, this allows 10% of the income from operations to be free from taxation . . . and Ken is able to give more income away to charitable organizations that are in alignment with his mission.

And then a brief outline “explanation” of the process:

Your gift is wrapped in an entity that allows you to continue to manage the asset. As manager, you remain involved in the oversight, management, and sale of your contributed asset.

The process is quick and efficient.

Complete one simple application with basic asset documents to CFT.

CFT sends you a gift acceptance package, containing

a. Your New LLC Articles & Minutes
b. Gift Agreement
c. Letter of Instruction
d. Appraisal Guidelines

Transfer your asset into the new LLC.

Next day sign the Gift Agreement.

CFT delivers your receipt package with a manager kit.

Obtain an appraisal of the asset.