Facts: Diversified Industries has been owned by the Gray family for three generations. The Gray family has received an offer from a large public company to buy Diversified Industries. The sale price is $400 million and will be paid in cash at closing. The board of directors and management have accepted a Letter of Intent from the acquirer and are negotiating the terms. An informal poll of the family found that family members owning about 80% of the shares are strongly in favor of selling Diversified. Closing of the deal will happen the last week of December. Linda Gray is the CEO of Diversified and owns 25% of the shares in her sole name. Her cost basis in those shares is $20,000,000. She also has a publicly traded stock portfolio worth $10 million, $2 million of which is Apple stock, which has a cost basis of $150,000, and $1 million of which is Tesla stock, with a cost basis of $75,000. Note that she loves both of these stocks and thinks they will go higher and, thus, doesnt want to sell them. Linda is very charitable-minded and would like to increase the amount that she gives to charity after her liquidity event. With that in mind, she thinks shed like to fund a charitable entity before the end of the year with $15 million. In addition to the sale proceeds, her income in 2023 will include $1 million in compensation and $200,000 in investment income.

You are Lindas advisor. What do you advise with respect to the following: 1.What assets should Linda use to fund the $15 million gift: (a) Diversified Stock, (b) assets from her investment portfolio, or (c) cash (or a combination of them)? Please provide a short explanation of your recommendation.

2.Should she create a DAF or Private Foundation (or both)? Please explain.

3.Will she be able to deduct the $15 million contribution fully on her 2023 tax return?