You are treasurer of a church. A member approaches you with the following proposition: “I will donate shares to the church on December 31, if, on January 1, you will sell them back to me. All you will need to do is convey the certificate with your signature to me in return for my cheque, which will be for the asking price of the shares quoted that day without reduction for commissions.”
The member’s objective, of course, is to obtain the income tax deduction as of December 31, but he wants to maintain his ownership interest. The policy of the church board is not to hold any shares but to sell shares within a reasonably short time.
a. Should the treasurer accommodate the member? Would you if you were treasurer?
b. Would your considerations and conclusions be any different if the church.
1. Was financially secure and the gift was small?
2. Was financially secure and the gift was large?
3. Would be in deficit position for the year were it not for the gift?