Planned Giving
Gifts of Appreciated Stock (or other assets)
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 Phillip and Anna 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).
Phillip
and Anna 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
Phillip and Anna first sold the stock and then donated the proceeds after deducting
the capital gain taxes. Also, Phillip and Anna 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 (called tangible personal property) can be utilized as gifts with the possibility of tax benefits. These are assets such as real estate, antiques, coin or stamp collections, and art. However, these are reviewed on a case-by-case basis. For more information about gifts of any appreciated assets, please contact us so we can respond to your specific needs.