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Give a Gift of Stock
A gift of securities that 1) have gone up in value and 2) have been owned more than one year, is one of the wisest gift you can make in terms of tax savings.
Individuals who give highly appreciated stocks and bonds receive a double tax benefit that can increase the impact of their generosity. As shown in the table below, you can deduct the full fair market value of your securities—not just what you paid originally—and you will save again by avoiding all capital gains taxes on your “paper profits.”
Mutual fund shares, including bond mutual funds, can be given with the same beneficial effect as actively traded stock.
Further, as a result of recent tax changes in the American Taxpayer Relief Act of 2012, tax savings for gifts of appreciated securities can be even higher for donors who owe the new 3.8% net investment income tax or pay capital gains tax at a 20% rate.
Tax Savings from Giving Stock Worth $10,000 which Had a Cost Basis of $5,000
*Includes 3.8% tax on net investment income.
The best method of transferring these assets is to contact your broker and electronically transfer the stock from your account to the Independent Institute’s account at Wells Fargo Advisors. Avoid selling the assets and then making a gift of the proceeds, because this will trigger a capital gains liability for you.
In order for the Independent Institute to acknowledge your gift and provide you with an IRS receipt, please take the following steps:
If you are at least age 70½, you have until Dec. 31, 2013 to take advantage of the extended rules for tax savings by making a qualified charitable distribution (QCD) from your IRA.
A QCD (also known as an IRA Charitable Rollover) is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to the Independent Institute or other qualified charity.
The Institute has a Memorandum of Instruction (PDF) that you may provide your IRA custodian in order to make the distribution to us. Please also let us know that you are making an IRA distribution to the Independent Institute, by calling (510) 632-1366, ext. 152, or by email.
As with all decisions involving tax consequences, please consult with your own tax professional.
Copyright 2015 The Independent Institute