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The gift of an appreciated 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
their 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.
Return to Wills
and Bequests or to Charitable
Lead Trust story.
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