Donate Stocks and Securities
Tax-wise planning and charitable intentions can go hand-in-hand. One of the most effective ways to accomplish this is through the donation of stocks and securities.
For donors, a contribution of securities may result in substantial IRS tax benefits in the form of charitable deductions and avoidance of capital gains taxes.
Stock that increases in value and has been held for over one year is subject to a capital gains tax when sold. By donating the stock, you avoid tax on the gain, and your contribution deduction is equal to the stock’s full fair-market value.
If your securities have decreased in value since you purchased them, it is better to sell the securities first and then donate the cash. When you sell securities at a loss, you will be able to utilize the loss to offset capital gains or deduct the capital loss versus income up to $3,000. You will still be able to deduct the cash donation.
Making a contribution of stock or mutual funds will result in many benefits for you. These may include:
- Avoiding federal and state tax on the capital gain;
- Receiving an income tax deduction (federal and most states) for the full market value of your gift if you itemize deductions on your tax return and have held the assets one year or longer; and
- Making a larger gift at a lower original cost to you.
Please be advised that tax laws constantly change, and special regulations apply to gifts of closely held securities and appreciated properties. We encourage you to consult with your financial advisor, broker, and/or Chimps Inc. when considering such gifts.
Chimps Inc. EIN#: 93-1202061. Please don’t hesitate to contact us with any questions you may have.