Goal: Avoid capital gains tax on securities sale
Benefit: No capital gains tax and charitable deduction based on fair market value
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 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 gains tax. Also, Richard and Terri receive a greater
tax deduction by giving the stock directly to the charity and avoiding
the capital gains 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.
Return to Bequests, to the Legacy Giving home page, or to the Quick Guide to Legacy Gifts.
For more information or a confidential discussion of your charitable options, please email or call Vice President Jim Williams at (727) 523-1512 ext. 1050.