The U.S. stock market has been reaching new heights these past several months. That’s good news for your investments and retirement. It can also be good news for the charitable giving that you might want to do. Have you considered giving appreciated stock to Sycamore? There are a couple of reasons why you would want to give the stock that you have owned for over a year, rather than a cash gift, to Sycamore.
Taxes! When you donate appreciated stock, you are able to deduct the amount of the charitable donation AND escape the unrealized gain on the donated stock. For example, let’s say you bought the stock last February for $5,000 and today it is worth $10,000. You plan to donate the entire amount to Sycamore. If you sold the stock instead of donating it, you would pay tax on the $5,000 gain in value. The tax rate for long-term capital gains is 15%. Therefore the tax savings for donating rather than selling is $750.
In addition, you can claim a tax deduction for the market value of the donated shares--the full $10,000--as a charitable deduction. If you are in the 25% federal tax bracket, this could generate another $2,500 in tax savings ($10,000 x 25%). This brings your total tax savings to $3,250. If you are in a higher tax bracket, your donation deduction will be even more. And you are able to donate an amount that is twice what it originally cost you.
With the Fulfilling Promise Campaign ending in June and stocks climbing higher, now might be a very good time to consider giving a gift of U.S. stock that you have held for over a year. For more information and assistance with making a stock gift, please contact Holly Lee in the Advancement Department at firstname.lastname@example.org.