Do you own highly appreciated stocks, bonds, or other securities? Consider gifting the stock to your donor advised fund, to Park City Community Foundation, or to your favorite nonprofit organization. The advantage: if your security has appreciated in value, you can avoid capital gains tax.
Advantages of giving securities include:
Avoid paying capital gains tax
Receive the total amount of the gift as a tax deduction.
Investopedia gives this example:
“For example, let’s say you were looking to make a $1,000 donation to a charity. You could either give cash or donate stock. Let’s assume that the you bought stock for an original purchase price of $700, but it is now worth $1,128.55. To make it simple, let’s assume capital gains tax is 30% of the stock’s appreciation. Selling the shares for cash would net about $1,000 after capital gains tax (1,128.55 – (1,128.55 – 700)*0.30). In this case, you should be indifferent between donating the entire stock or giving cash, as both choices will cost you $1,000. However, the charity can receive more benefit from a stock donation, as they will receive a gift valued at $1,128.55, instead of the $1,000 in cash.”
Park City Community Foundation encourages you to contact your financial and tax advisors to discuss the tax implications of any gift.
For instructions on how to make a gift of securities, click here or contact Katie Wright – 435-214-7476. To learn more about donor advised fund or other giving options and vehicles, visit our Ways to Give page.