Free Right Of Exchange
Categories: Company Management
You own 100 shares of Wasn’t Me Inc., a maker of scented underwear shields. You want to donate your shares to a charity known as the Flatus Society, dedicated to the eradication of gas-related discrimination.
Under the free right of exchange concept, you can transfer those shares without any penalty. This becomes important when it comes to tax time. If you sell stock at a profit, you would owe a capital gains tax. However, giving the stock away, you don’t incur the tax, thanks to the concept of free right of exchange.