While the heat outside indicates we’re far from thinking about stockings and presents, it’s always a good time to consider donating appreciated stocks as a gift to your favorite charities.
Giving stocks held longer than a year instead of giving cash saves you capital gain taxes. This advantage makes the after-tax cost of the contribution less for gifts of stock versus gifts of cash.
For example, if a donor in the 24% tax bracket has decided to make a $10,000 donation to charity and makes the gift in cash, it would look like this: For example, if a donor in the 24% tax bracket has decided to make a $10,000 donation to charity and makes the gift in cash, it would look like this:
If that same donor decided instead to give $10,000 worth of stock that was purchased for $2,000 more than one year ago, it would look like this:
However, despite the advantage, gifts of stock are often not well understood or widely used, possibly because we associate donations exclusively with cash instead of other assets.
To learn more, visit our planned giving page.
