Gifting Stock Maximizes Impact | RKL LLP
Posted on: June 25th, 2013

Charitable Giving: Gifting Stock Maximizes Impact

gifting stock

Want your charitable gift to make the maximum impact on your favorite charitable organization? Think twice before writing a check or liquidating appreciated stocks or mutual funds. By gifting stock directly to a qualified charitable organization, you create a multiplier effect on your gift to stretch it even further toward helping the organization’s mission.

With the market on the up-swing and asset appreciation on the rise, now could be a great time to utilize that stock you received from your grandmother years ago that’s collecting dust and put it to work in meeting your charitable goals.

A Win for You: Personal Tax Savings Benefits

By donating the stock directly to the qualified charitable organization, you’ll receive a charitable contribution deduction on your tax return based on the fair market value of the property donated. But what’s more, by donating the stock directly to the qualified charitable organization, you can avoid paying taxes on the gain in value when the stock or mutual fund is sold.

The taxes saved will include capital gains taxes (15% or 20%, depending on your income level), potential Medicare surcharge tax on net investment income of 3.8% (depending upon your income level), and state taxes, as well.

A Win for Your Charitable Organization of Choice

With your gift of stock, your favorite qualified charitable organization receives a larger donation to help fund its mission. Since charitable organizations are tax-exempt, they are not required to pay tax when they sell the donated stock or mutual fund.  As a result, the fair market value of your stock is received directly by the organization, with no tax impact on giver or receiver.

Considering your 2013 charitable giving strategies? RKL’s trusted tax advisors can help you make smart choices that foster bigger deductions and maximum impact to the charities of your choice. Learn more about our Tax Services Group or contact your RKL service provider.

Contributed by Scott Myers, CPA, CSEP

Scott is a Manager in RKL’s Tax Services Group. His area of emphasis is providing tax planning strategies and compliance solutions for closely-held businesses in a wide variety of industries and as well as individuals. Scott also focuses on estate and trust planning for individuals and their families.

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