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[figkms]

Everything should pass muster with the IRS as you have proposed, the value of shares donated to the charity will be based on their full value when ownership is transfered, and you should receive a deduction equal to the full amount of donation.

The one part of the thought process I don't understand is where the money would come from for the repurchase of the UPS stock at face value. Do you plan to make a UPS stock purchase with the savings on your tax return from the donation based on your tax bracket of 15%, 28%, 31%, or 39%.

 

[brown35]

If you feel it is age discrimination, have someone bring a lawsuit, this is not the place to be 'Thinking about it" or "wondering about it" or "feeling that way about it". It's a tough place to work. I think that there is no way that UPS would gain anything financially significant with terminating some 16's or 18's. Rumors coming out of Atlanta say there is PLENTY of EARLY RETIREMENT people going this year that the short term financial gain by true natural normal attrition will take care of the problem of over staffed (and graded) jobs.

 

[bigbrown]

Is there an arrangement somewhere that you can do this type of transaction and not have sales proceeds deducted from your 2.5%? I always thought that once you made a sale you lost your 2.5% until an amount equal to the sales proceeds had been withheld from the 2.5%. Either I misunderstood the rules or they have changed since the IPO.

 

[dabusdrivr]

>>

Could you explain what you meant by this statement? Are you planning on selling UPS shares and then donate the cash proceeds to a charity? It sounds more like you intend to sell the shares, take a charitable writeoff, and then use the proceeds from the sale to repurchase the shares again. They will have a new cost basis, but you have donated nothing tangible to a charity. I suggest you get with a financial consultant who can provide you with the proper method for Charitable giving. Your current plan will get you in hot water with the IRS.

 

[vgpa]

Maybe in your dreams .

 

[figkms]

Mountaingoat everything you are attempting to do makes sense, taking shares from a stock portfolio and donate the shares to the charity at the current value, (say 1 share @ $56) and then when filing tax return deduct an amount equal to the donation ($56), all would be okay with IRS. The savings in taxes due on return or possibily the cash referred to in the post would only be the donation ($56 X tax bracket ie. 15%, 28%, ect.) Assume tax bracket of 15% donor would/could have cash available of $8.40 ($56 x 15%) to purchase new shares.

I think the flaw in the equation and the reason I asked for further clarification was it seems according to the post there would cash derived from somewhere. (Posters statement: Then the donor could take the cash that would have gone to the charitable organization and repurchase UPS stock at the face value.) The only cash would be in tax saving as example above shows. If poster thought cash funds equal to donation would be available somehow say from the charity, then there would have been no transfer of value and there would be no reason for a tax deduction.

All advice will be speculative until poster clarifies the statement in paragraph two. The correct course of action is always to talk with your financial planner and CPA as part of any charitable giving or tax planning strategy.

 

[jcroche]

According to a news report, a certain private school in Victoria recently was faced with a unique problem.

A number of 12 year old girls were beginning to use lipstick and would put it on in the bathroom. That was fine, but after they put on their lipstick they would press their lips to the mirror leaving dozens of little lip prints. Every night, the maintenance man would remove them and the next day, the girls would put them back.

Finally the principal decided that something had to be done. She called all the girls to the bathroom and met them there with the maintenance man.

She explained that all these lip prints were causing a major problem for the custodian who had to clean the mirrors every night.To demonstrate
how difficult it had been to clean the mirrors, she asked the maintenance man to show the girls how much effort was required.

He took out a long-handled squeegee, dipped it in the toilet, and cleaned the mirror with it. Since then, there have been no lip prints on the mirror.


There are teachers, and then there are educators.....

 

[mountaingoat]

The money to repurchase shares donated would come from my own personal pocketbook. That is, instead of giving $5000 cash to my church over a period of a year, I would give them a one-time donation of UPS stock worth the $5000 dollars. They get the full face value of the shares, and I deduct the full face value from my taxes (theoretically). Then, I take the $5000 cash that I would have given the church, and purchase UPS shares at the current price. These shares would go back into my ownership (admittedly as B shares).

So, if I gave 89 UPS shares to my church, they would have a value of about $5000 @ $56/share. The church gets the shares, not me. I have moved 89 shares (@$56) out of my portfolio. Then, in a completely separate transaction that has nothing to do with the sale, I would purchase 89 shares with my $5000 cash (basically, instead of giving my $5000 cash to the church, I'd buy my stock with it, and then donate $5000 worth of stock (from an early receipt number) to the church).

My thought would that this would keep my net share ownership the same, my dividends wouldn't change, and I don't know about the 2.5%. I'm not using it to cheat the IRS (they'd find me anyway if I did), but to start moving some stock out of my portfolio little by little and reduce my estate taxes.

 

[jcroche]

Let's get back to basics.

Let's say that I am a person who plans to donate to charity.

In 2002, because of my economic stature, I intend to donate $10K(cash)to charity(s).

I can then use this as a "tax deduction".

BUT, instead I donate $10K in UPS stock using my oldest cost basis shares. (BTW - I have $.25 cost basis shares due to splits - same as OPL)

I can still write off the $10K donation (current market value). I then take the $10K (cash) that I had INTENDED to donate to charity, and repurchase UPS shares @ the current market value (be careful of "WASH" rules).

The net result is that I still have the same position in my holdings, I get a current year tax write-off, and my future tax liability is lessened
because of my difference in cost basis when I do sell (capital gains).

 

[marmac]

Brown35 you seem to get upset when the facts are not favorable to you convictions. This is America and everyone is free to express their knowledge or opinion. So with that if you have nothing to contribute, just don't reply.

 

[lr1937]

Not to confuse the issue but you can do a charitable remainder trust. You could put $100 in the trust and write about 25% it off on your taxes. You would then get 6 or 7 % of the $100 anually for as long as you live.(depending on age) The 6 or 7% is taxed as regular income. This is a good way to deversify. You will need the help of a financial planner and a lawyer. The lawyer will charge for the service. As with any way of deversifying there are pros and cons. What ever you do get the advice and help of a professional.

 

[vgpa]

Talk about termination to brown35 and the reason for being "fired" is for playing with #s, lack of intergrity,etc, but my favorite is being a thief.
So, you have a chance to come "clean" and admitt to something that didn't happen OR you can take a CASH SETTLEMENT. Not a bad deal!

 

[figkms]

mountaingoat, thanks for the clarification, doing as you suggested will not cause any problems with the IRS. It actually does work better for the charity and donor to do as you have proposed. The charity will end up with the full value of the stock price thus a larger donation, and you get the full deduction of the donation without realizing any capital gains taxes. The IRS and STATE tax departments take no portion of the funds when processing the donation in this manner.

jcroche, does the wash sale rules apply in this case as this is a donation and transfer of ownership to third party, this isn't a personal sale of stock and repurchase of the shares within the 30 day time period? I was under the impression the wash rule would not apply in this transaction.

By using your own personal cash to buy the new UPS shares as you have stated you would accomplish your objective as originally stated.

 

[jcroche]

figkms:

As to "wash rules", I'm not certain as to how they would apply in this case - I only threw that in to make people aware that they are out there. In all cases, consult your tax consultant or CPA.

jcr

 

[figkms]

jcr

Thanks, and I agree consult the professionals.

 

[dabusdrivr]

Mountaingoat, Your strategy (now that I understand it) is excellent. The church benefits, you benefit with a tax writeoff, and the IRS gets "Nothing". You now own the same amout of UPS shares, get the same dividends, and the most recently purchased shares have a much higher cost basis. That's what I call a win-win situation for everyone.(except the IRS) The "Wash rule" shouldn't apply on a Charitable donation, but check with your financial advisor first before going forth with the transaction.

 

[flimflam]

"the firm has been stymied by a culture focused on its core business"

This is a wake up call. Our position in our industry is mature and without the potential for tremendous growth. To put new emphasis on businesses that have expansion room is essential if we are going to continue to grow.

"This could be a brilliant move, if Eskew can pull it off. UPS has made it clear that logistics and other nonpackage businesses will drive growth"

I applaud Eskew and the other decision makers at UPS for their foresight and ability to look beyond the status quo at UPS.

 

[hubiebrown]

Brown35,
"...If you feel it is age discrimination, have someone bring a lawsuit, this is not the place to be 'Thinking about it" or "wondering about it" or "feeling that way about it"..."

Hubie,
And where exactly would one go "to be 'Thinking about it" or "wondering about it" or "feeling that way about it"? Agree or disagree but it does not seem to be an out of bounds topic. What better way to air the dirty laundry than to bring it out into the sunshine and hang it up. It should answer the question one way or the other. JMHO

 

[mountaingoat]

Thanks to all of you. It looks like my initial reply didn't go through. In theory, this looked like a "win-win" and I'll definitely pursue it.

 

[flimflam]

SmartMoney - Stock Close-Up
FedEx Delivers the Goods
By Robert Hunter

excerpt:
"when United Parcel Service (NYSE:UPS - news) delivers something to my house, it usually looks as though it had been dragged from the back of the truck and then catapulted onto my lawn (or thereabouts). But my new Rockports came via FedEx (NYSE:FDX - news) Home Delivery, the most trusted name in package hauling, at least in my neighborhood. A nice man rang the bell and handed my shoes to me. It was a lovely experience. I even toyed with the idea of snapping a photo of the two of us for posterity's sake."

This monthly publication from the Wall Street Journal is one of my favorites. I'm disappointed that the author's packages are being handled so roughly, especially because it is not indicative of our overall package handling record. Another wake up call, this is a very influential publication in the investment world.