Many people's portfolios include stocks, and many donors find it convenient to use stocks as a way of making their gifts to their favorite charitable organization. So if you're planning a gift, have a look at your stock portfolio. Those that have appreciated in value allow you to be able to potentially make a gift much larger than what you originally planned and you will benefit from the tax savings as well.

How does this Double Tax Break work? First of all, it's important to remember that any stocks that have appreciated in value from what you originally paid for them will be subject to capital gains tax at the time they're sold.

In making a gift, if you were to sell the stock and use the proceeds as your donation, you would be forfeiting a hefty amount in capital gains tax. Instead, by donating the stock itself instead of the proceeds from the sale of the stock you will avoid capital gains tax altogether, amounting to substantial cash savings for you. And the full value of the stock will be available to use as a gift and consequently the value of the charitable deduction you claim will be higher.

Gifts of stock have become increasingly popular for donors of all ages:

  • The young donor saves through both the charitable deduction and the hard cash he or she is freeing up. 
  • The middle-aged donor can create a charitable remainder trust (CRT) with donated stock and with the income received from such a CRT is able to fund his or her child's or grandchild's education. 
  • The retired donor escapes the risks of the market and by establishing a life income gift with a charitable organization, can receive yearly payouts, often larger than the return they were receiving on the stock.

We'll be glad to assist you, your attorney, and/or tax advisor in pursuing this further. Please call us today at:

1-800-992-2383 ext. 510