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). For example,
suppose Richard and Terri in this example had 300
shares of XYZ Corporation that they had purchased
at $15.00 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).
They
could sell the stock, pay the tax on the capital gain,
and either keep or donate the proceeds. If, instead
of selling the stock, Richard and Terri gave the 300
shares to their charity, they would not incur any
capital gains and would be able to deduct the current
value (300 shares X $36 = $10,800) as a charitable
gift. By donating the stock, the charity receives
more 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 involves 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
other assets are reviewed on a case-by-case basis.
For more information about gifts of appreciated assets,
please contact us so that we can respond to your specific
needs.
Return
to Wills and Bequests
or to Charitable Lead Trusts
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