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The
gift of an asset, often common stock or mutual fund shares, is a valuable way
to make a contribution to a charitable organization and receive tax benefits based
on the value of  the
asset(s). Suppose Richard and Terri had 300 shares of XYZ
Corporation that they purchased at $15 a share some years ago. The current value
in today's market is $36 a share. If they sold the stock in the market, they would
have a taxable, long-term capital gain on the difference between their cost and
what they would receive from the sale ($36 minus $15 = $21 capital gain per share.
300 shares X $21.00 = $6,300 in capital gains).  
Richard
and Terri could sell the stock, pay the tax on the capital gain, and either keep
or donate the proceeds. If, however, instead of selling the stock, they gave the
300 shares to charity, they would not incur any capital gains and would be able
to deduct the current value (300 shares X $36 = $10,800) on their tax return as
a charitable gift. By donating the stock, the charity receives a larger gift than
it would receive if Richard and Terri first sold the stock and then donated the
proceeds after deducting the capital gain taxes. Also, Richard and Terri receive
a greater tax deduction by giving the stock directly to the charity and avoiding
the capital gain tax. While the gift of appreciated assets
often is stock, other marketable assets, such as land, antiques, and homes, can
be utilized as potential gifts with the possibility of valuable tax benefits.
However, these are reviewed on a case-by-case basis. For more information about
gifts of appreciated assets, please contact us so
we can respond to your specific needs. Here is some information about how
to donate stock to the Boston Rescue Mission. Return
to Wills and Bequests or to Charitable
Lead Trust story.
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