Gifts of Stock
Gifts of long-term appreciated securities are the most common
type of outright property gift. Typically, individual stocks are
given; however, highly appreciated bonds or mutual fund shares are
also attractive gift options. Outright gifts of securities can be
made quickly and these gifts let you do more with your gift because
of the very attractive tax benefits.
For appreciated property held long term, the full fair market
value of securities given to charity is generally deductible. For
example, if you give shares of stock that are now worth $10,000,
you can deduct the full amount of the gift on your income tax
return (subject to certain income limitations), even though you may
have bought the stock for less than $1,000.
A charitable gift of securities held long-term is not
considered a sale of the securities and does not generate any
capital gains tax. This is a valuable tax reward provided by
Congress to encourage gifts of appreciated property.
Indeed, no matter how much a security has appreciated in value,
a charitable gift will not make any part of your paper profit
taxable. The result: a charitable deduction is allowed for profits
that have never been taxed. And, if we sell the securities, we keep
every penny of the proceeds since we are tax exempt.
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