Giving Now
Appreciated Securities
Gifts of appreciated securities held long term are one of the best ways to maximize the value of a gift
Gifts of appreciated securities held long term are one of the best ways to maximize the value of a gift and minimize the after tax cost. Donors of appreciated stock receive a tax deduction for the full fair market value of the stock on the date of gift and pay no capital gain tax on the appreciation. A charitable contribution deduction of up to 30% of adjusted gross income is available, with carryover for up to five years for any unused deduction.
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Name: |
Kathryn Jones |
| Age: |
58 |
| Situation: |
Assets have increased in value since she bought them, but she is uncertain about their future as a viable investment. |
| Gift Plan: |
Donate securities "out of the market" to preserve cash, avoid capital gains tax, generate current income tax savings and make a significant charitable gift. |
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Kathryn Jones, who is in the 28% income tax bracket, owns securities currently valued at $30,000, which she purchased many years ago for $7,500. She contributes the securities to Maryknoll and realizes a $30,000 charitable deduction that saves her $8,400 in income taxes (28% of $30,000). In addition, Kathryn avoids the potential capital gain tax on her $22,500 paper profit for a further savings of $4,500 (20% of $22,500). Therefore, the net cost of the gift of $30,000 of appreciated stock is $17,100 ($30,000 less $8,400 less $4,500). In other words, the cost of the gift is only 57% of the face value of the gift of securities. |
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