Gifts of Appreciated Securities
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
in this example had 300 shares of XYZ Corporation that they 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).
Richard
and Terri could sell the stock, pay the tax on the capital gain, and either
keep or donate the proceeds. If, instead of selling the stock, they 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 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.