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Donating Appreciated Stock

Did you know...

that appreciated stock is one of the easiest ways to give to Saint THomas Academy*? And appreciated stock is something we definitely appreciate!

The following information is from an article on schwab.com (click the link for the entire article)...

You can usually deduct the full fair market value of appreciated long-term assets you've held for more than one year, such as stocks, bonds, or mutual funds. In addition, if you donate stocks or other investments, you pay no capital gains tax.

Donating investments — especially highly appreciated securities — instead of cash can be a very effective and tax-efficient way to support a charity. Generally, if your assets have appreciated in value, it's best not to sell securities to generate the cash you need for a donation. Contributing the securities directly to the charity increases the amount of your gift as well as your deduction.

One rule to remember here is that the deduction is limited to 30% of your adjusted gross income (AGI). This differs from a 60% limit for donations of cash, but you can still give mixed donations (cash and appreciated assets) up to the 50% AGI limitation. If you're not able to use the entire donation deduction this year, you can still carry forward unused deductions for five years. If you're planning a large contribution that's close to or exceeds these AGI limits, first talk with a tax professional.

Here's an example to help you decide if donating appreciated investments is a good option for you. Let's assume that you're married filing jointly, are in the 32% tax bracket, and want to donate $100,000 worth of stock. In this example, you see that donating the stock results in no capital gains tax being paid and a larger itemized deduction.

* Always consult your tax advisor before transferring securities