The ability to receive an income tax deduction for donations of private company stock can be a useful tax planning tool for founders. Assuming the stock has been held for more than one year, a founder can generally deduct the fair market value of the stock when contributed to a tax-exempt public charity (including a donor advised fund). The amount of the deduction for private company stock is generally capped at 20% of the founder’s adjusted gross income, with the ability to carryforward for five-years any amount not deductible in the year of donation. By making a donation of stock, the founder also generally avoids paying income tax on unrealized gains – i.e. the appreciation that has occurred from the time the founder acquired the stock until the time it is donated. In effect, the founder receives two benefits – (i) the founder does not have to pay tax on the unrealized gains in the gifted stock and (ii) the founder receives a charitable deduction for the fair market value of the gifted stock that can be used to reduce tax on the founder’s other income.