Although nearly half of Americans hold securities like stocks, bonds or mutual fund shares, many do not realize they can give those securities directly to a charitable organization instead of giving cash. Using securities can be an excellent way to accomplish your philanthropic goals while receiving tax benefits and conserving cash for other purposes, regardless of whether you itemize deductions for
tax purposes.
For example
Jim and Donna are planning to give cash contributions at year-end to their favorite charities, after rebalancing their portfolio by selling some stock. They decide instead to give stock they purchased years ago that has increased in value since they owned it. By giving the stock, they are able to deduct its full current value while completely bypassing the capital gains tax that would have been due had they sold it. Even if they do not itemize deductions, they avoid income tax on the stock that would have been due if they sold it.
A quiz
This quiz may help you find out if giving securities may be the best way for you to make a charitable gift to Cal Farley’s:
- I’m considering selling some securities, and I want to minimize any capital gains tax I may have to pay.
Yes No - I would like to make a charitable gift to Cal Farley’s, but I don’t have much cash available right now.
Yes No - I would like to reduce my future capital gains tax if my securities continue to grow.
Yes No
If you answered “yes” to any of these questions and would like more information about making a gift of securities this year-end, click now to contact our gift planning office.
The final months of the year can be a good time to review your overall financial and personal goals — and make plans for the future. Ongoing changes in tax laws, possible fluctuations in the investment market and other factors make it especially important to weigh your financial decisions carefully this year. Time spent considering your financial priorities, including how best to support Cal Farley’s and other charitable interests, can help you maximize the impact of your gifts by taking advantage of available tax savings and other welcome benefits.
This article appeared in The Heritage, Vol. 21 Number 4, 2019.