Are you considering how you can make a significant difference in your charitable giving this year or planning your end-of-year giving strategy? Previously, this newsletter provided information on making a gift from an IRA, using the Qualified Charitable Distribution (QCD), if you’re 70 ½ or older. In this issue, you’ll find information on using stock to support CFH or your other favorite charities.

Below are some of the tax benefits to donating stock*:

Gifts of Appreciated Stock:

You may give appreciated securities and deduct the Full Market Value (FMV). However, one must their securities longer than 12 months to do so. They can also avoid taxes on long-term capital gains on any outright gifts. In addition, they can deduct the full FMV up to 30% of their Adjusted Gross Income (the excess, if any, may be subject to the carryover privilege).

Gifts of Depreciated Stock:

If the donor sells securities and gives the proceeds to a nonprofit, they can take a tax deduction for the amount of the gift and a tax deduction for the capital loss.

Bargain Sale:

The donor can sell an appreciated security to a charity at a price that is less than the FMV. A deduction of the difference between the FMV and the price sold to the charity is available, if they do so. (Some capital gains have to be reported).

Funding Charitable Remainder Trusts and Pooled Income Funds:

The FMV of the security, is the value of the transferred asset. Capital gains tax is avoided at the time of funding. However, it may be reported in the future when annual income is received.

Funding Annuities:

The FMV of the securities is the value of the initial gift for an annuity. Capital gains tax is not avoided. However, it is spread over the life expectancy of the annuitant.

Funding Bequests:

The FMV of the securities transferred to a charity by the donor’s will is fully deductible for estate tax purposes.

*Information provided by LAPA Fundraising. Additionally, this information is not tax or legal advice. Please contact a tax professional for guidance based on your financial situation.