The 90-Day Charitable Planning Window Before a Business Sale
- J.T. Hardcastle
- Jun 29
- 4 min read
For many business owners, the single most valuable piece of charitable planning they will ever do happens in a window of about ninety days — the stretch between when a sale becomes likely and when the deal becomes binding. Handle that window well and you can erase the capital gains tax on a large slice of your company while funding years of generosity. Miss it, and the same gift costs you a fortune more, or becomes impossible. The window is real, it's short, and it closes the instant you sign.
Most owners don't even know it exists until it's already gone. So before you get to the closing table, understand how this works, because the difference between acting early and acting late is often hundreds of thousands of dollars.
Why timing is everything
The core move in pre-sale charitable planning is simple: give part of the business before it sells, not the cash after. When you transfer shares to a charity, a donor advised fund, or a charitable trust, and that entity then sells the shares, the gain on the donated portion escapes capital gains tax — because a charity is tax-exempt. You also capture a deduction for the fair market value of what you gave.
But the entity has to own the shares before the sale is locked in. Give appreciated stock to a donor advised fund and it sells tax-free; the same is true of a charitable trust. Sell first and donate the proceeds, and you've already triggered the tax. The whole advantage lives in the sequence.
What opens the window — and what slams it shut
The window opens when a sale becomes a real possibility, typically around a letter of intent, and it closes when the transaction becomes legally binding. The gift must be made before a binding agreement is in place; a letter of intent is generally fine as long as it's non-binding and either side could still walk away.
Push past that line and you collide with the assignment of income doctrine. The IRS can disregard the gift and tax you on the gain anyway if your right to the sale proceeds had already become fixed and "practically certain to occur" when you gave the shares. There's no bright-line date — courts look at all the facts and circumstances — which is exactly why you want to act early and clearly, not on the eve of closing. Mistime it and you can suffer a "double whammy": you've given away the asset and you owe the tax.
Pre-sale timing is one of the few planning moves where being a few weeks early is worth six figures and being a day late ruins it. A Clarity Call before your letter of intent is the cheapest insurance there is — 30 minutes with a Partner, no pitch.
Thinking about selling? Book a Clarity Call before you sign anything.
What to do inside the window
Once a sale looks likely, the to-do list is short but time-sensitive:
- Decide your charitable intent. How much of the company do you want to give, and to what end — a lump sum to a cause, an income stream, a family giving fund? - Choose the vehicle. A donor advised fund offers flexibility and simplicity; a charitable remainder trust provides an income stream back to you. The right one depends on whether you want to give the money away or get paid from it first. - Get a qualified valuation. Private company shares need a defensible appraisal to support the deduction, and that takes time to commission. - Transfer the shares to the charity or trust before the deal is binding.
Why ninety days
The number isn't magic, but it reflects reality. The window tends to open at the letter of intent and close at signing, and due diligence on a business sale often runs sixty to ninety days in between. Meanwhile, commissioning a valuation and executing a clean transfer of private shares takes weeks of its own. Start at the letter of intent and you have room to do it right. Start at the closing and there's no room at all — the appraisal isn't done, the transfer isn't clean, and the assignment of income doctrine is breathing down your neck.
The lesson business owners learn too late is that charitable planning belongs at the front of a sale, not the end. By the time the wire hits your account, every lever has already been pulled by someone else, and the tax is simply due. Bring your advisors into the conversation the moment a sale becomes likely — even before — and that ninety-day window becomes one of the most productive stretches of planning in your financial life. The causes you care about, and your own after-tax outcome, both depend on what you do before you sign.
Build the team before the window opens
The reason so many owners miss this window isn't ignorance of the tax benefit — it's that the right people aren't in the room early enough. Pre-sale charitable planning requires a coordinated team: your wealth advisor, your CPA, your estate attorney, and often an appraiser, all working from the same timeline. Assembled at the letter of intent, that team can execute cleanly. Assembled at the closing, they can only watch the opportunity pass.
So the most valuable thing you can do is start the conversation absurdly early — before a buyer is even at the table, when a sale is merely something you're considering. That's when you can decide your charitable intent calmly, choose the right vehicle without time pressure, and have the structure ready to deploy the moment a deal becomes likely. Owners who wait until they have a signed letter of intent in hand have already compressed the window; those who wait until diligence is underway have often closed it. The discipline that separates a six-figure tax savings from a six-figure tax bill is almost entirely about sequence and timing, not cleverness. Get the team together early, agree on the plan, and keep the structure on the shelf ready to use. Then, when the sale becomes real, you act inside the window instead of mourning it after the fact.
Every sale and every cap table is different, and the timing rules are unforgiving. The conversations that move people from "interesting idea" to "actual decision" happen one-on-one — your deal, your numbers, an honest read.
Book a Clarity Call — 30 minutes with a Partner. No pitch. No homework.
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