Stock and Non-cash Gifts

What do I do with that old stock?

Appreciated Securities Like cash gifts, gifts of noncash property are tax-deductible; however, tax laws offer special incentives for gifts of noncash property, especially those that have increased in value since purchased or acquired. If you own stocks, bonds, treasuries, and mutual funds that have appreciated in value, you can reduce your tax liability and increase the value of your gift by donating appreciated securities.

By donating appreciated securities, you avoid capital gains tax and receive an income tax deduction based on the fair market value of the securities on the date of transfer. The deductible amount includes what you paid for the securities and its appreciated value.

If your securities have dropped in value below their original cost, you may benefit more by selling them and donating the cash proceeds. You may then be able to take a capital loss on your tax return as well as a charitable deduction for the cash gifts.

Some investments represent savings that you plan to use for income and security in later years. In this case, a gift of securities may be used to fund a life income gift, such as a Unitrust or Charitable Remainder Trust for which you will receive a life income that in some cases may exceed the income you have been receiving from the stock.

Getting maximum tax benefits from charitable giving is not always easy. Tax laws are complex as a result we recommend you work with your tax advisor, lawyer, or financial advisor when you are considering making a gift of this type.