Home Stewardship › Year End Donation Planning

 

 

 

The collection at Christmas is the single most important collection of the year for our parish. There is a tax advantage

to giving appreciated stock in lieu of cash when you are considering this donation.

 

If you have held a stock in your investment portfolio for more than a year you can claim a deduction of the market value

 of the donated shares as a charitable donation deduction.

 

For example, let's say you bought stock for $ 2,500 last November and today it is worth $5,000.

You can donate the entire amount to a charitable organization. If you sold the $5,000 stock instead of donating it,

you would pay capital gains tax on the $2,500 gain in value.

The tax rate for longterm capital gains is 15 percent. Therefore, the tax savings for donating rather than

selling the stock would be $375 (2,500x15%). 

 

In addition, you can claim a deduction of the full market value of the donated shares -- the full $5,000 - -

as a charitable donation deduction. If you are in the 30 percent federal tax bracket,

this could generate another $1,500 (5,000 x 30%) in tax savings. This brings your total tax savings to $1,875.

If you are in a higher tax bracket, your donation deduction will be even more.

Also consider this: you are giving a gift that is two times what it originally cost you.

 

So as you can see your tax benefits from making a donation of appreciated stock versus giving cash can be substantial.
 

This information is not intended and should not be construed as legal, tax or investment advice.

For such advice, please consult an attorney, tax advisor or investment professional.

 
 
 

 
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