|Donate Your Shares
There are tremendous tax advantages to donating stock - discuss these tips with your financial advisor.
Long Term - Appreciated in Value
There is a real tax advantage to donating stock you have held for over a year that has appreciated in value. By donating the stock, you avoid paying capital gains tax and you can deduct the full market value on your income tax.
For example, suppose you purchased shares over a year ago for $1000 that are now worth $2000. If you sell the stock and donate the proceeds you will first have to pay 15% long term capital gains tax on your profit, or $150. Your tax deductable donation would be $1850.
If however you donate the stock, you could deduct the full market value, or $2000. The charity can then sell it without paying capital gains because we are tax exempt. We get a bigger donation and you get a bigger deduction. Everyone wins (except maybe the IRS).
Long or Short Term - Depreciated in Value
For stocks that have lost value (depreciated) the key is to sell them first and then give the cash proceeds to Foster Care Justice Alliance. You benefit tax-wise in two ways - you can take both the loss deduction and the charitable deduction.
Short Term - Appreciated in Value
For stocks that you have held less than a year, you can only deduct the original purchase price of the stock, regardless of whether it has appreciated in value. However, if you donate the stock you still avoid short term capital gains tax, which is taxed as regular income and could be as high as 35%.
Foster Care Justice Alliance
Account # 754128506
Please remind your broker to include your name, contact information, and any special instructions for use of the gift with your transfer. To expedite the processing of your gift, we suggest that you contact us with information about the type of stock and number of shares, as well as any special considerations you may have. Please direct information about your gift and any other questions to email@example.com.
Sample Letter of Instructions
to Your Broker:
Dear (your stock broker):
The purpose of this letter is
to direct you to transfer_______ shares of stock in (company) from
Account # _____ in my name (or in the name of ______) to the account of
the Foster Care Justice Alliance, Tax I.D. #26-2539725, at: Account
#754128506, TD AMERITRADE, Inc., DTC #0188. This gift is ___ unrestricted
___ to be used for _________________.