Based on the recent growth of the stock market, you may want to consider a gift of appreciated stock that you have owned for more than one year. If you continue to itemize your deductions, you can claim an income tax charitable deduction for the stock's current value, plus, you would avoid paying tax on the capital gain. (Please compare the examples in the table below.)
|
Donate $10,000 in appreciated stock ($2,000 cost basis) |
Donate $10,000 cash |
First sell appreciated stock and then donate cash |
Charitable deduction |
$10,000 |
$10,000 |
$10,000 |
Ordinary income tax saving (32% bracket) |
$3,200 |
$3,200 |
$3,200 |
Capital gains tax (20% on $8,000 gain) |
$1,600 saved |
N/A |
$1,600 paid |
Total tax savings |
$4,800 |
$3,200 |
$1,600 |
Even if you can no longer itemize your deductions, donating appreciated stock can still be a good idea, as you would avoid the capital gains tax that would be due if you sold the stock. For additional information for you and your financial advisor or broker, please see below. If you have any questions regarding making a gift of stock, please contact the Advancement office.