This is truly a small pool of potential donors.
The single type of sole proprietor who will have an interest in gifing his or her business assets would be the person who wants to dispose of the business.
There's not much more to be said.
For details about how to value a sole proprietorship when the opportunity for accepting one as a gift arises, check out the How to Value page.
There are no tax issues related to the sole proprietorship as it not a formal organization. Sole proprietorships are free of state and federal regulations - mostly. And, 'mostly' isn't even mentioned in this material.
Valuing the assets of a sole proprietorship is pretty straightforward:
Regardless of the capital assets owned by the proprietor, in order to receive a gift of the assets, you need to have a qualified appraisal of the assets. And that's it.
You don't need to get an appraisal that evaluates what the business would be worth with all the assets plus a premium for the name and reputation of the business (such and appraisal is frequently referred to as "Blue Sky"), because tax policy precludes that complete package from being a good gift.
A C-corp may deduct the value of the charitable gift up to a limit of 10% of its adjusted taxable income. In such cases, a charitable gift by a C-corporation is reported and deducted on its federal income tax return (Form 1120).
When a prospective donor of yours holds an interest in an entity taxed as a partnership, a charitable gift can be an attractive planning opportunity for both the donor and your organization. This is true as long as ALL the partners are on the same page and that the bylaws of the partnership allow gifting.
But the transfer of a partnership interest poses special challenges for both of you.
From a tax perspective, the transfer of a partnership interest poses special challenges for all parties involved. Here's the crucial complicating factor:
Charitable gifts made by partnerships are accounted for by the partners on their individual income tax returns, which means the size and nature of the gift are subject to their individual parameters rather than those of the partnership as a whole.