For a Great Gift, Give AAFSW Appreciated Stock

As the end of the tax year approaches, your tax decisions 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!