Method of Receipt on Donation and Delivering Fair Market Valuation of Same

8/7/2019 Method of Receipt on Donation and Delivering Fair Market Valuation of Same

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Method of Receiving Stock, Donating it, and Receiving Fair Market Valuation for SameUnited States Patent Application

Chris Ryan

December 6,2010

Charities today due to the economy are suffering what has been termed "donor fatigue" and the needfor charities to increase operational efficiency is a critical component for survival. One way charitiescan increase donor contributions is by offering contributors additional value added services to theirdonors and property that they donate.Most contributors to a charitable cause are doing so for the tax deduction of the property contributed.In light of this the IRS, has passed several Internal Revenue Codes (IRe) to establish procedures andpolicy to the valuation and acceptance of collateral. These codes require the contributor to procurevaluation opinions for property donated, which places both risk and burden upon the donor. Thistranslates into property and assets not being donated to the charity.Method of receiving stock, donating it and receiving a fair market valuation for same is a system whichgenerates a multi pronged analysis of the contribution scenario. It consists of analysis of: the stock to becontributed; the donation; the charity; and the individual or entity donating the property. Last theanalysis generates a certificate of donation for the donor from the charity with all legal opinions andvaluation analysis support behind it. This is all done to create a simultaneous turnkey donationenvironment, for the benefit of the Charity leveraging service and timing.

CLAIMS1. A method in support of a Charity having investors who purchased Single Stock Futures

Contract(s) to take delivery of the underlying securities.2. A method showing and supporting the valuation of the shares in support of a Charity having

investors who purchased Single Stock Futures Contract(s) to take delivery of the underlyingsecurities.

3. A method of delivering to Investors who take delivery of shares underlying Single StockFutures Contract, that the shares are unrestricted under rule 144.

4. A method showing and supporting the valuation of donated shares by an Investor who takesdelivery of the shares underlying a single stock futures contract.

5. A method of delivering to Investors who take delivery of shares underlying Single StockFutures Contract, an expert opinion that the shares donated to a particular Charity willreceive a certain percentage of tax deduction from income taxes.

6. A method upon receipt of payment for delivery to simultaneously issuing the shares torecipient who takes delivery of the shares underlying the Single Stock Futures Contract.

7. A method in support of a Charity of simultaneously issuing a receipt of shares from Donor.


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8. A method in support of a Charity of simultaneously issuing a valuation opinion to Donor whodonates shares from the delivery of shares underlying the Single Stock Futures Contract.

9. A method is support of the Charity to issue to donor an expert analysis and opinion of thecharities standing with the state registered in, and IRSstatus.

10. A method is support of the Charity to issue to donor an expert analysis and opinion that theCharity structure will afford a certain percentage deduction to donor.

11. A method of executing 1-10 above in a simultaneous manner.DESCRIPTION

CROSS-REFERENCE TO RELATED APPL ICATIONS[0001] The present application claims no priority from any previously filed provisional applications forthe benefit of the earlier filing dates of which is hereby claimed under 35 U.s.c. .sctn. 119(e), and eachof which are further incorporated by reference.

F IE LD OF INVENTION[0002] This invention relates to a Charity non-profit method of raising capital by having purchasers whohas purchased from Charity a Single Stock Futures Contract (SSFe),(representing the right of purchaserto take delivery of the shares underlying the SSFCsometime in the future) in paying the Charity thefuture cost of taking delivery of the shares underlying the SSFC. It is a system which creates amechanism whereby the Charity can execute delivery of the shares underlying a Single Stock FuturesContract, by giving the purchaser an opportunity to capture a simultaneous value arbitrage, by receivingthe shares and simultaneously donating them to a 501(c)(3). The value created in this arbitrage scenariocan by this invention be simultaneously demonstrated and supported with third party expert opinions,which can lead to the Charity giving the Donor an instant Certificate of Donation or Receipt of Donation(representing shares delivered and donated under the SSFC)with valuation of donation with supportdocumentation attached. This instant Certificate of Donation/receipt allows donor the option of lockingin the value created under the donation and receiving the fair market valuation of the stock donatedunder Internal Revenue Code (IRe) 1234(b) thus allowing donor an option of locking in value andmitigating the market risk of selling acquired shares in the open market.

B AC KGROUN D O F T HE IN VE NTIO N[0003] Charities registered under section 501(c)(3) (Charity) are allowed to issue shares via anexemption from Securities and Exchange Commission registration. One type of security a Charity canissue is an instrument created by the Commodity Modernization Act known as a Single Stock FutureContract (SSFe). This combination creates an opportunity for a Charity to be the recipient ofdonated/gifted shares (public/non-public companies) and to distribute them to prospective purchasersvia the issuance of the issue specific SSFC,representing a contract to give the purchaser(s) the right totake delivery of the securities underlying the SSFCin the future. This SSFCsale allows a Charity to receiveimmediate premium income while affording it the ability of receiving additional income representing thedelivery of said shares underlying the SSFCto purchasers who decide to take delivery. In order forpurchasers to take delivery a clear communication of value and receipt of same must be provided in a


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seamless simultaneous environment which this inventions mechanism creates. In order to understandthe background of the invention, current business practices are presented below, followed by legalframeworks, structures and tools available to conduct business transactions under u.s. law.[0004] Current Business Practices[0005] IRG- Irrevocable Registration Guarantee- A instrument offered by a law firm, confirming tocompany that it will have a calss of securities registered under section12(g) of the 1934 Act.

[0006] EXSO-exempt securities legal opinion- otherwise known as a rule 144 legal opinion is a legalopinion issued to a purchaser of a stock that the shares acquired are available for exemption under Codeof Federal Regulations title 17.230.144. Rule 144- Rule 144, promulgated by the SECunder the 1933 Act,permits, under limited circumstances, the sale of restricted and controlled securities withoutregistration. In addition to restrictions on the minimum length of time for which such securities must beheld and the maximum volume permitted to be sold, the issuer must agree to the sale. If certainrequirements are met, Form 144 must be filed with the SEC.Often, the issuer requires that a legalopinion be given indicating that the resale complies with the rule. The amount of securities sold duringany subsequent 3-month period generally does not exceed any of the following limitations:

1%of the stock outstanding The avg weekly reported volume of trading in the securities on all national securities exchanges

for the preceding 4 weeks The avg weekly volume of trading of the securities reported through the consolidated

transactions reporting system (NASDAQ)

Notice of resale is provided to the SECif the amount of securities sold in reliance on Rule 144 in any 3-month period exceeds 5,000 shares or if they have an aggregate sales price in excess of $50,000. Afterone year, Rule 144(k) allows for the permanent removal of the restriction except as to 'insiders'.In cases of mergers, buyouts or takeovers, owners of securities who had previously filed Form 144 andstill wish to sell restricted and controlled securities must refile Form 144 once the merger, buyout ortakeover has been completed.

[0007] CMA-Commodity Modernization Act- is United States federal legislation that clarified most over-the-counter derivatives ("OTC derivatives") transactions between "sophisticated parties" would not beregulated as "futures" under the Commodity Exchange Act (CEA) or as "securities" under the federalsecurities laws. Instead, the major dealers of those products (banks and securities firms) would continueto have their dealings in OTC derivatives supervised by their federal regulators under general "safetyand soundness" standards. "Functional regulation" of derivatives products by the Commodity FuturesTrading Commission (CFTC)was rejected for continued "entity-based supervision of OTC derivativesdealers.[0008] SRL-Shareholder Representation Letter- A letter from purchasers of stock seeking a rule 144opinion, pertaining to how the shares were acquired, date and affiliation to the issuer.


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[0009] CAO- Charity Analysis Opinion- An analysis of a 501(c)(3) status for qualification and percentageof deduction eligible for concerning donated property.[0010] FMVO- Fair Market Value Opinion- An opinion based on the value of a donation that can beclaimed, Qualified Holders of SSFCunder IRC1256 will be entitled to 'tack' the holding period of theSSFConto the holding period of the Capital Stock received pursuant to the terms and provisions of theSSFC,which qualifies as "capital gain property" within the meaning of IRe 170(b)(1)(C)(iv} to beentitled to treat the gains or losses realized upon the subsequent sale of the SSFCCapital Stock as 'Iong-term' capital gain or loss, and the value of the Charitable Deduction for a donation of the SSFCCapitalStock as "qualified appreciated stock" within the meaning of IRe 170(e)(S)(B}, which entitles the SSFCpurchaser (the Holder) to deduct on a 1040 tax return or an 1120 tax return the "market value"determined by the market quotations published on the date of the donation or contribution to acharitable or other organization qualified to receive tax deductible donations under IRe 170(c)(2},rather than the Holder's 'purchase price' in the SSFCCapital Stock, provided only that the Holder (andhis family as defined in IRe 267(c)(4), above) do not attempt to contribute more than the 10% of theentire outstanding shares of Capital Stock in the corporation to the charitable or other qualifiedorganization, contrary to the provisions of IRe 170(e)(S)(C) above.[0011] ATI- Anticipated Taxable Income- Donor's estimated taxable income for the coming year.[0012] TSTB- Transmittal Summary of Tax Benefit-A summary sheet issued from the 501(c)(3) to theDonor prior to the donation which is an estimate of the value the Donor would be able to deduct fromperosnla taxable income from the an anticipated donation.[0013] CDO- Certificate of Donation- A receipt issued from the 501(c)(3) to the Donor acknowledgingdate of transfer and collateral donated.[0014] SC- Stock Certificate- A physical certificate representing common stock ownership in certaincompany.[0015] Single Stock Futures Contracts-(SSFC) Became effective on November 2, 2002 after passageCommodity Futures Modernization Act of 2000. They Are futures contracts which with the underlyingasset being one particular stock. When purchased, no transmission of share rights or dividends occurs.Being futures contracts they are traded on margin, thus offering leverage, and they are also consideredan "asset class under Internal Revenue Code 1234(b) for purposes of tacking to determine holdingperiod to recognize long term capital gains and fair market valuation vs. cost basis as defined under IRC561.[0016] Common Stock-is a form of corporate equity ownership, a type of security It is called "common"to distinguish it from preferred.[0017] Internal Revenue Code[0018] IRC 1234(b) Defines a "securities futures contract" as: "(c) Securities futures contract -- Forpurposes of this section, the term 'securities futures contract' means any security future (as defined in


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3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of thissection). The Secretary may prescribe regulations regarding the status of contracts the values of whichare determined directly or indirectly by reference to any index which becomes (or ceases to be) anarrowbased security index (as defined for purposes of 1256(g)(6))." According to the summary oflegislative history notes following IRe 1234B, the section was: "Added {by} Pub. L. 106-554, Sec.1(a)(7)[title IV, Sec.401(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-648;{and} amended {by} Pub. L. 107-147, title IV, Sec.412(d)(1)(B), (3)(B), Mar. 9, 2002, 116 Stat. 53,54; Pub.L. 108- 311, title IV, Sec. 405(a)(1), Oct. 4, 2004, 118 Stat. 1188.)" -- (Note that "[ ]" appear in theoriginal; and "{ }" are used to show additions/insertions to the text of the Legislative History Note to 26use 1234B.) And, 3 (a)(55) thru (57) were added to the Securities Exchange Act of 1934 by P.L. 106-544, enacted Dec. 21, 2000, which also enacted IRe 1234B.In its entirety, 26 use 1234B reads: "Gains or losses from securities futures contracts - (a) Treatmentof gain or loss - (1) In general -- Gain or loss attributable to the sale, exchange, or termination of asecurities futures contract shall be considered gain or loss from the sale or exchange of property whichhas the same character as the property to which the contract relates has in the hands of the taxpayer(or would have in the hands of the taxpayer if acquired by the taxpayer). (2) Nonapplication ofsubsection -- This subsection shall not apply to - (A) a contract which constitutes property described inparagraph (1) or (7) of 1221(a), and (B) any income derived in connection with a contract which,without regard to this subsection, is treated as other than gain from the sale or exchange of a capitalasset. (b) Short-term gains and losses -- Except as provided in the regulations under section 1092(b) orthis section, or in 1233, if gain or loss on the sale, exchange, or termination of a securities futurescontract to sell property is considered as gain or loss from the sale or exchange of a capital asset, suchgain or loss shall be treated as short-term capital gain or loss. (c) Securities futures contract -- Forpurposes of this section, the term 'securities futures contract' means any security future (as defined in3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of thissection). The Secretary may prescribe regulations regarding the status of contracts the values of whichare determined directly or indirectly by reference to any index which becomes (or ceases to be) anarrowbased security index (as defined for purposes of 1256(g)(6)). (d) Contracts not treated ascommodity futures contracts -- For purposes of this title, a securities futures contract shall not betreated as a commodity futures contract. (e) Regulations -- The Secretary shall prescribe suchregulations as may be appropriate to provide for the proper treatment of securities futures contractsunder this title. (f) Cross reference -- For special rules relating to dealer securities futures contracts, see1256." 9 Note that 3(a)(55)(A) of the Securities Exchange Act of 1934 was enacted on the same dateas IRe 1234B[0019] IRC1223(4) -Provides that: "(14) If the security to which a securities futures contract (as definedin 1234B ) relates (other than a contract to which 1256 applies) is acquired in satisfaction of suchcontract, in determining the period for which the taxpayer has held such security, there shall beincluded the period for which the taxpayer held such contract if such contract was a capital asset in thehands of the taxpayer."

The contract is not one to which IRe 1256 applies, because the last sentence of IRe 1256(b) limits thedefinition of a "1256 contract" so as to "not include any securities futures contract ... unless suchcontract ... is a dealer securities futures contract." The term "dealer securities futures contract" islimited by IRe 1256(g)(9)(A) to contracts which are "entered into" or "purchased or granted" "by [a]dealer ... in the normal course of [the dealer's] activity of dealing in such contracts" which are "tradedon a qualified board or exchange", and by IRe 1256(g)(9)(B) to a "person [who] performs ... functions


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similar to the functions performed by [options dealers] described in paragraph (8)(A)." And, the"options dealer" described in IRe 1256 (g)(8)(A) is clearly limited to a "person registered with [a]national securities exchange as a market maker or specialist", who has the obligation to make a marketin one or more designated securities on a regular and continuous basis, under the provisions of theSecurities Exchange Act of 1934, compiled in 15 USC78c at 15 USC78c (a)(38).

[0020] IRSPublication 561-Determination of Fair Market Value Stocks and Bonds-http://www.irs.gov/publications/p561/ar02.html#dOe216Selling prices on valuation date. If there is an active market for the contributed stocks or bonds on astock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is theaverage price between the highest and lowest quoted selling prices on the valuation date. For example,if the highest selling price for a share was $11, and the lowest $9, the average price is $10. You get theaverage price by adding $11 and $9 and dividing the sum by 2.No sales on valuation date. If there were no sales on the valuation date, but there were sales within areasonable period before and after the valuation date, you determine FMV by taking the average pricebetween the highest and lowest sales prices on the nearest date before and on the nearest date afterthe valuation date. Then you weight these averages in inverse order by the respective number of tradingdays between the selling dates and the valuation date.Example. On the day you gave stock to a qualified organization, there were no sales of the stock. Salesof the stock nearest the valuation date took place two trading days before the valuation date at anaverage selling price of $10 and three trading days after the valuation date at an average selling price of$15. The FMV on the valuation date was $12, figured as follows:[(3 x $10) 1+ 1(2x $15)] 1.;- 15 1= 1$12

Listings on more than one stock exchange. Stocks or bonds listed on more than one stock exchangeare valued based on the prices of the exchange on which they are principally dealt. This applies if theseprices are published in a generally available listing or publication of general circulation. If this is notapplicable, and the stocks or bonds are reported on a composite listing of combined exchanges in apublication of general circulation, use the composite list. See also Unavailable prices or closely heldcorporation, later.Bid and asked prices on valuation date. If there were no sales within a reasonable period before andafter the valuation date, the FMV is the average price between the bona fide bid and asked prices on thevaluation date.

Example.Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and askedprices were available on that date of $14 and $16, respectively. The FMV is $15, the average pricebetween the bid and asked prices.No prices on valuation date. If there were no prices available on the valuation date, you determineFMV by taking the average prices between the bona fide bid and asked prices on the closest trading datebefore and after the valuation date. Both dates must be within a reasonable period. Then you weight


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these averages in inverse order by the respective number of trading days between the bid and askeddates and the valuation date.Example.On the day you gave stock to a qualified organization, no prices were available. Bona fide bid and askedprices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. The FMVon the valuation date is $13, figured as follows:[(2 x $10) 1 + 1 ( 3 x $15)]Prices only before or after valuation date, but not both. If no selling prices or bona fide bid and askedprices are available on a date within a reasonable period before the valuation date, but are available ona date within a reasonable period after the valuation date, or vice versa, then the average price betweenthe highest and lowest of such available prices may be treated as the value.Large blocks of stock. When a large block of stock is put on the market, it may lower the selling price ofthe stock if the supply is greater than the demand. On the other hand, market forces may exist that willafford higher prices for large blocks of stock. Because of the many factors to be considered, determiningthe value of large blocks of stock usually requires the help of experts specializing in underwriting largequantities of securities, or in trading in the securities of the industry of which the particular company is apart.Unavailable prices or closely held corporation. If selling prices or bid and asked prices are notavailable, or if securities of a closely held corporation are involved, determine the FMV by consideringthe following factors.

For bonds, the soundness of the security, the interest yield, the date of maturity, and otherrelevant factors.

For shares of stock, the company's net worth, prospective earning power and dividend-payingcapacity, and other relevant factors.

Other factors. Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business.

For preferred stock, the most important factors are its yield, dividend coverage, and protection of itsliquidation preference. You should keep complete financial and other information on which thevaluation is based. This includes copies of reports of examinations of the company made byaccountants, engineers, or any technical experts on or close to the valuation date. Restricted securities.Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities andExchange Commission, or by the corporate charter or a trust agreement. These restricted securitiesusually trade at a discount in relation to freely traded securities. To arrive at the FMV of restricted


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securities, factors that you must consider include the resale provrsions found in the restrictionagreements, the relative negotiating strengths of the buyer and seller, and the market experience offreely traded securities of the same classas the restricted securities.

[0021] IRS Form 8283- Generally, if the claimed deduction for an item or group of similar items ofdonated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser,and you must attach Section B of Form 8283 to your tax return. There are exceptions, discussed later.You should keep the appraiser's report with your written records. Records are discussed in Publication526.

The phrase "similar items" means property of the same generic category or type (whether or notdonated to the same donee), such as stamp collections, coin collections, lithographs, paintings,photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpubliclytraded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances,toys, everyday kitchenware, china, crystal, or silver. For example, if you give books to three schools andyou deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 forthese books. You must get a qualified appraisal of the books and for each school you must attach a fullycompleted Form 8283, Section B, to your tax return.

Exceptions. You do not need an appraisal if the property is:

Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross

proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are "qualified contributions" for the

care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the InternalRevenue Code, or

Stock in trade, inventory, or property held primarily for sale to customers in the ordinary courseof your trade or business.

Although an appraisal is not required for the types of property just listed, you must provide certaininformation about a donation of any of these types of property on Form 8283.Publicly traded securities. Even if your claimed deduction is more than $5,000, neither a qualifiedappraisal nor Section Bof Form 8283 is required for publicly traded securities that are:

Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published

quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published

on a daily basis in a newspaper of general circulation throughout the United States.

Publicly traded securities that meet these requirements must be reported on Form 8283, Section A.A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, foran issue of a security that does not meet the requirements just listed but does meet theserequirements:


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1. The issue is regularly traded during the computation period (defined later) in a market for whichthere isan "interdealer quotation system" (defined later),

2. The issuer or agent computes the "average trading price" (defined later) for the same issue forthe computation period,

3. The average trading price and total volume of the issue during the computation period arepublished in a newspaper of general circulation throughout the United States, not later than thelast day of the month following the end of the calendar quarter in which the computation periodends,

4. The issuer or agent keeps books and records that list for each transaction during thecomputation period the date of settlement of the transaction, the name and address of thebroker or dealer making the market in which the transaction occurred, and the trading price andvolume, and

5. The issuer or agent permits the Internal Revenue Service to review the books and recordsdescribed in item (4) with respect to transactions during the computation period upon receivingreasonable notice.

An interdealer quotation system is any system of general circulation to brokers and dealers thatregularly disseminates quotations of obligations by two or more identified brokers or dealers who arenot related to either the issuer or agent who computes the average trading price of the security. Aquotation sheet prepared and distributed by a broker or dealer in the regular course of business andcontaining only quotations of that broker or dealer is not an interdealer quotation system.The average trading price is the average price of all transactions (weighted by volume), other thanoriginal issue or redemption transactions, conducted through a United States office of a broker or dealerwho maintains a market in the issue of the security during the computation period. Bid and askedquotations are not taken into account.The computation period is weekly during October through December and monthly during Januarythrough September. The weekly computation periods during October through December begin with thefirst Monday in October and end with the first Sunday following the last Monday in December.Nonpublicly traded stock. If you contribute nonpublicly traded stock, for which you claim a deductionof $10,000 or less, a qualified appraisal is not required. However, you must attach Form 8283 to your taxreturn, with Section B, Parts I and IV, completed.

[0022] Securities and ExchangeCommission- The U.S.S ecu rities a nd E xch an ge C omm issio n (frequentlyabbreviated SEC) is a federal agency which holds primary responsibility for enforcing the federalsecurities laws and regulating the securities industry, the nation's stock and options exchanges, andother electronic securities markets in the United States. In addition to the 1934 Act that created it, theSECenforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. The SECwas created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.s.c. 78d andcommonly referred to as the 1934 Act).


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[0023] Rule 144- Rule 144- Rule 144, promulgated by the SECunder the 1933 Act, permits, underlimited circumstances, the sale of restricted and controlled securities without registration. In addition torestrictions on the minimum length of time for which such securities must be held and the maximumvolume permitted to be sold, the issuer must agree to the sale. If certain requirements are met, Form144 must be filed with the SEC.Often, the issuer requires that a legal opinion be given indicating thatthe resale complies with the rule. The amount of securities sold during any subsequent 3-month periodgenerally does not exceed any of the following limitations:

1%of the stock outstanding The avg weekly reported volume of trading in the securities on all national securities exchanges

for the preceding 4 weeks The avg weekly volume of trading of the securities reported through the consolidated

transactions reporting system (NASDAQ)

[0024] Commodity Modernization Act- is United States federal legislation that clarified most over-the-counter derivatives ("OTC derivatives") transactions between "sophisticated parties" would not beregulated as "futures" under the Commodity Exchange Act (CEA) or as "securities" under the federalsecurities laws. Instead, the major dealers of those products (banks and securities firms) would continueto have their dealings in OTC derivatives supervised by their federal regulators under general "safetyand soundness" standards. "Functional regulation" of derivatives products by the Commodity FuturesTrading Commission (CFTC)was rejected for continued "entity-based supervision of OTC derivativesdealers.[0025] European Clearing Structure- European Clearing Structure- An option that can only be exercisedat the end of its life, at its maturity.[0026] Non Profit 501(c)(3) is an American tax-exempt, nonprofit corporation or association. Section501(c) of the United States Internal Revenue Code (26 U.s.C. 501(c))

DETAILED DESCRIPTION OF CERTAIN EMBODIMENTS[0026] The present invention is described more fully hereinafter with reference to specific illustrativeembodiments. This invention may, however, be embodied in many different forms and should not beconstrued as limited to the embodiments set forth herein; rather, these embodiments are provided sothat this disclosure will be thorough and complete, and will fully convey the scope of the invention tothose skilled in the art. The methods may involve one or more entities (including a person, business,non-profit, computer device, or the like) performing some or all parts of an action, or set of actions. Theentities may communicate in-person, over a network, including a computer network, or the like. Thefollowing detailed description is, therefore, not to be taken in a limiting sense.[0027] Throughout the specification and claims, the following terms take the meanings explicitlyassociated herein, unless the context clearly dictates otherwise. The phrase "in one embodiment" as


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used herein does not necessarily refer to the same embodiment, though it may. Furthermore, thephrases "in another embodiment" or "in an alternate embodiment" as used herein does not necessarilyrefer to a different embodiment, although it may. Thus, as described below, various embodiments of theinvention may be readily combined, without departing from the scope or spirit of the invention.

[0028] In addition, as used herein, the term "based on" is not exclusive and allows for being based onadditional factors not described, unless the context clearly dictates otherwise. In addition, throughoutthe specification, the meaning of "a," "an," and "the" include plural references. The meaning of "in"includes "in" and "on."

[0029] As used herein, the term "decision maker" refers to a director, an officer, an employee, acommittee, a partner, a general partner, a manager, a member, a trustee, trustee in bankruptcy, agent,attorney-in-fact, advisor, singly or in any combination, who or which is in a position to make decisionsfor or on behalf of a business or affecting a business.

[0030] The term "asset" means an item of property in which the business owns or holds an ownershipinterest or beneficial interest, directly or indirectly, and encompasses all forms and varieties of assets,including without limitation, partial interests, undivided interests, jointly held interests, co-tenancyinterests, stock, equity interests, tangibles, real estate, personality, aswell as intangibles of every varietyand description, including without limitation goodwill, paper, interests in litigation, records, intellectualproperty, and investment interests.

[0031] The terms "stock" and "equity" refer to any type of equity ownership in a business, includingpreferred stock, common stock, LLCunits, partnership units, or the like.

[0032] In accordance with one aspect of the invention, a method to support a charity in receiving stockas a donation and giving a receipt of same, supports the fundraising charities and other 501(c)(3)institutions. The method includes the step of proceeding with the business objective in response to adecision by a decision maker by performing the following steps.[0033] SSFCis a a Single Stock Futures Contract, a financial instrument created under the CommodityModernization Act of 2001.[0034] EXSOis an exempt securities legal opinion issued by a law firm who provides opinions to theSecurities and ExchangeCommission, tha the securities underlying the exercise of the SSFC'sare exemptfrom registration under Rule 144.[0035] SRLis a shareholder representation letter given by the entity procuring EXSOto the law firm.[0036] CAO is a Charity Analysis Opinion, procured by the 501(c)(3) institution receiving the donation,providing a third party expert opinion that the charity is on good standing and is classified as either apublic charity, private charity or foundation for determination of percentage of the deduction a donorcan expect to receive as a percentage of the value donated.


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[0037] FMVO is a fair market valuation opinion issued by a third party expert to the donor representingthe value of the donation given to the indentified 501(c)(3).[0038] ATI is anticipated taxable income bracket of the donor[0039] TSTB is a transmittal summary of tax benefits which is issued to the donor from the 501(c)(3)which received the donation.[0040] Donor is the owner of a Single Stock Futures Contract (SSFC),which gives owner the right to takedelivery of a certain number of securities at a predetermined price on certain date in the future.[0041] Donor wishes to exercise and take delivery of the shares represented under the SSFCand donatethem (part or whole) to a non-profit 501(c)(3) corporation (NPC).[0042] Prior to exercise of the SSFCcontract, delivery of the securities and donation of acquired shares(part or whole) to NPC, the Donor wants to know what value his/her donation will be income taxpurposes.[0043] NPC being the anticipated beneficiary of donation (whole or part) undertakes to deliver to Donora Certificate of Donation (COD) - representing the exercise of the SSFC,delivery of shares and fairmarket valuation of donation on day donation was made. The (COD) is comprised of: Receipt of theDelivery of Shares from Donor; Legal Opinion of Unrestricted Status of Acquired Shares Under the SSFC(Diagram 1); Charity Analysis Opinion (Diagram 2);and Fair Market Valuation Opinion of Donation (Diagram 3).[0044] The combination of 5 A through D together creates a mechanism to support the exercise of theSSFCand donation of the delivered shares to the charity. This mechanism creates a scenario where theDonor can realize that the tax advantage of exercise of the SSFCcombined with simultaneous deliveryand donation to NPC of securities acquired would be greater in certain circumstances then the deliveryprice of taking possession of acquired shares via the SSFC(Diagram 4).[0045] NPC initiates COD by obtaining an Exempt Securities Legal Opinion (EXSO) that the Securitiesdelivered under the SSFCare exempt from restriction as per rule 144.[0046] To support [0045] above NPC procures from shareholder a signed representation letter,identifying when consideration and possession of the SSFC took place, amount of shares to bedelivered/exercised and confirmation that Donor is not management, affiliate or control person ofshares to be donated.(Diagram 1.1).[0047] NPC takes possession of signed Shareholder representation letter and procures legal review ofnecessary Transactional Documents (Diagram 1.2).[0048] Upon conditions and representations made by shareholder being truthful an EXSOis generatedwith attached signed Shareholder representation as exhibit.


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[0049] If EXSO is procured then NPC attaches recent Charity Analysis Opinion (CAO) which identifieswhether targeted beneficiary Charity is in good standing with the State, IRSand what type of and howmuch as a percentage of donation would be qualified for deduction purposes (Diagram 2.1).[0050] Upon EXSO and CAO being acceptable, NPC then procures a Fair Market Valuation Opinion(FMVO) of the targeted donation (Diagram 3).[0051] NPC procures from Donor their Anticipated Taxable Income (ATI) and Anticipated Taxable IncomeBracket (ATIB).[0052] NPCthen generates a Transmittal Summary of Tax Benefits (TSTB) of Exercise and Donation[0053] NPCapproaches Donor with TSTB[0054] Upon Donor agreeing to exercise SSFCand takes delivery of Securit ies.[0055] NPC Simultaneously issues a Stock Certificate (SC) to Donor representing the shares acquired viathe exercise of the SSFC.[0056] Donor endorses SCto NPC.[0057] NPC issues simultaneously to Donor, EXSO,CAO, and FMVO concerning the shares donated.[0058] NPC issues simultaneously to Donor date stamped receipt of Donation.[0059] NPC issues simultaneously to Donor a Certificate of Donation, which encompasses the FMVOvaluation of stock, and date stamped receipt of Donation.

DESCRIPTION OF THE DRAWINGS[0060] Non-limiting and non-exhaustive embodiments of the present invention are described withreference to the accompanying drawings. In the drawings, like reference numerals refer to like partsthroughout the various figures unless otherwise specified.[0061] Diagram 1 illustrates process the present invention can operate in providing the securitiesdonated are exempt from registration under CFRTitle 17.230.144.[0062] Diagram 1.1 illustrates process the present invention can operate in obtaining the correctshareholder representations needed in order to obtain an exempt securities opinion;[0063] Diagram 1.2 illustrates process the present invention can operate in obtaining the correcttransactional due diligence in order to obtain an exempt securities opinion;[0064] Diagram 2 illustrates a process the present invention can operate in obtaining a Charity (501(c)(3) ) Analysis Opinion;


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[0073] It will be understood that the steps of the flowchart illustrations described herein can beperformed in different orders and some steps may be omitted, without departing from the spirit of theinvention.

[0074] It will also be understood that certain steps in the flowchart illustrations, and combinations ofsteps in the flowchart illustrations, can be implemented by computer program instructions. Theseprogram instructions can be provided to a processor to produce a machine, such that the instructions,which execute on the processor, create means for implementing the actions specified in the flowchartstep or steps. The computer program instructions can be executed by a processor to cause a series ofoperational steps to be performed by the processor to produce a computer implemented process suchthat the instructions, which execute on the processor to provide steps for implementing the actionsspecified in the flowchart step or steps. The computer program instructions can also cause at least someof the operational steps shown in the steps of the flowchart to be performed in parallel. Moreover,some of the steps may also be performed across more than one processor, such as might arise in amulti-processor computer system.

[0075] Accordingly, steps of the flowchart illustrations support combinations of means for performingthe specified actions, combinations of steps for performing the specified actions and programinstruction means for performing the specified actions. It will also be understood that each step of theflowchart illustrations, and combinations of steps in the flowchart illustrations, can be implemented byspecial purpose hardware-based systems which perform the specified actions or steps, or combinationsof special purpose hardware and computer instructions. Further, it should be understood that aspects ofany particular embodiment can be combined with features and aspects of other embodiments inpracticing the present invention.

[0069] Since many embodiments of the invention can be made without departing from the spirit andscope of the invention, the invention is to be defined by the claims hereinafter appended.


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Diagram 1. Creation of Exempt Securities Opinion EXSO

Exhibit 1.1 Shareholder Representations Form

ShareholderRepresentationsForm Letter

Tra nsa ctiona IDue Diligence

Exhibit 1.2 Transactional Due Diligence

Rule 144 LegalOpinion Issued


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Diagram 1.1 Shareholder Representation Form and Checklist

Managem entCantrall Insider o fIssuer

Amount of shares e - - - - - - - - .less than 1% YESL______ ShareholderRepresentationsForm Letter Acquisition ofSSFC>366 Days

Shares Paid for

1. Shares paid for and physically delivered.2. Amount of shares represent less than 1% of the Issued and Outstanding common stock capital of Issuer.3. Shareholder is NOT an Insider, Officer, Director, Affiliate of the Issuer.4. All Shareholder representations are correct and Shareholder representation letter is signed and dated.5. Shareholder acquired shares via the exercise of a (SSFC).6. Shareholder obtained the Single Stock Futures Contract and has recorded consideration of same more than 366 days7. Shareholder inputs in sellers representation letter amount of shares and class acquired via exercise of SSCF.8. Form is printed, shareholder confirms accuracy of same, sign, dates and submits to Donor Rep. for Legal Review


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Diagram 1.2 Legal Review of Transactional Documents

Transactional DueDiligence Issuance of Rule 144Legal Opinion

9. Shareholder representations from Exhibit 1.1 are correct and right10. Issuer is current with its mandatory Securities and ExchangeCommission filings.11. Issuer is current an din good standing with the Secretary of State in the state it is incorporated in.12. Articles of incorporation and bylaws have been reviewed.13. Issuer is not considered a 419/415 "blank check company' and is presently executing on its reported business14. Issuer has a class of securities registered with the Securities ExchangeCommission under section 12(g)


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Diagram 2. Creation of Charity Analysis Opinion

Charity

LegalReview

Issuance ofCharity Ana lysis

Opinion

Exhibit 2.1 Charity Analysis Legal review


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Diagram 2.1 Charity Analysis Opinion

LegalReview

2\----------.Review of By-Laws & Articlesof Incorporation

Review of 990's Review ofCharity Activity

Issuance oCharity Ana ly

Opinion


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Diagram 3 Fair Market Valuation Opinion

SSFCConsiderationand more than

366 days

ExemptSecurities

Legal Opinion

CharityAnalysis

Fair MarketValuationOpinion

Yes

Yes

Yes

Fair MarketValuationReport