For a Great Gift, Give AAFSW Appreciated Stock

As the end of the tax year approaches, your tax decisions for 2017 are winding down. For some of us, the tax laws give us a good way to maximize charitable donations. If you hold some equities which have appreciated greatly here’s some interesting (and easy) math.

Cash Donation:                             Appreciated Securities:
$10,000                                               $10,000 (with a cost basis of $1,000, assuming 28% income tax)

Income Tax Saved:
$2,800                                                 $2,800

Capital Gains Saved:
$0                                                         $1,350 (Assuming 15% capital gainstax on $9,000 of appreciation)

Total Tax Savings:
$2,800                                                 $4,150

Total Cost of $10,000 Gift

Cash Donation:                           Appreciated Securities:
$7,200                                                $5,850

 

The IRS stipulates that the securities are directly gifted to the charity, which then sells the assets so you yourself do not incur any capital gains. It is a win-win for everyone!

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