A $5,000 cash gift and a gift of $5,000 in appreciated securities both generate the same charitable deduction.
But if you use publicly traded stocks, bonds, or mutual fund shares that you have held for a year or longer to make your gift, you will receive an additional tax benefit: The IRS allows you to make your transfer to the Diocese without recognizing capital gains on the appreciation. You can thus leverage a larger donation than you could make with cash — and receive a larger tax benefit — by "buying low and giving high."
Your gift of stock is valued, for tax purposes, at the mean of the high and low on the date the shares are received in our account. Mutual funds are valued at the "net asset value."
If you and your advisors are transferring assets at the end of the year, it is especially important to note the following.
Important Tip: Don't sell the stock first. Even though you may give us the proceeds as a gift, the IRS will impose capital gains tax on your sale, wiping out the benefits of this arrangement.
A gift of appreciated securities is for you if…
It is important that you contact us so that we can assist you with transfer instructions. If you own securities in a brokerage account, we can help you set up an electronic transfer of the shares to our brokerage account. If you possess actual stock certificates, we can tell you how to sign the certificates over to us and fill out a stock power form.
Assuming you are giving long-term (owned for 12 months or more) appreciated securities, you will receive a charitable income tax deduction equal to the fair market value of the shares. For common stock this is typically the mean value on the date that we take control of the shares you give. You will pay no capital gains tax. Gifts of stocks are deductible up to 30% of your adjusted gross income the year you make your gift. Any excess amount can be rolled over into the next tax year, for up to five additional tax years if needed.
It is generally our policy to liquidate any donated stock shares very soon after receiving them, so that we can use the cash proceeds for the purpose you designate.
In many cases yes, and considerable tax benefits can result. However, giving closely held stock is more complicated than giving publicly traded securities and may be subject to certain transfer restrictions. We stand ready to assist you with your gift intention. One prerequisite to our acceptance of a gift of closely held stock is that the business or the shares have had a recent qualified appraisal. Please contact us so that we can walk you through the process.