Gifts of Stocks, Bonds & Mutual Funds
If you own appreciated stocks or mutual funds, this may be the best way to give to Camp Burton. Because the government incentivizes charitable giving, there are often tax benefits available for donating these assets.
The Double Benefit of Donating Appreciated Stock
The double benefit of donating appreciated stock to charity is avoiding capital gains tax on the appreciation and getting a charitable deduction for the stock's full fair market value, maximizing your tax savings and the gift's value compared to selling the stock first and donating cash. This allows you to give more to Camp Burton and potentially keep more for yourself, especially with assets held over a year (long-term).
How it Works (The Double Benefit):
· Avoid Capital Gains Tax: If you sell appreciated stock, you owe tax on the profit (capital gain). By donating the stock directly, Camp Burton (being tax-exempt) sells it without paying that tax, and you also avoid paying it.
· Receive Fair Market Value Deduction: You can deduct the stock's full market value (what it is worth when you donate it) from your taxable income, not just your original cost.
Example:
· You buy stock for $5,000 (cost basis) and it's now worth $30,000.
· If you sell and donate cash: You pay capital gains tax on the $25,000 profit, then donate the remaining cash, getting a deduction for the cash amount.
· If you donate the stock directly: You avoid the capital gains tax and get a deduction for the full $30,000, giving more to Camp Burton and saving more on taxes.
Key Considerations:
- Hold for Over a Year - This strategy works best for long-term investments held over a year to qualify for the full deduction and capital gains avoidance.
- Work with Advisors – Consult financial and tax professionals to ensure proper handling and IRS compliance.
For more information and assistance in donating stocks, bonds, mutual funds, and other non-cash gifts contact Ben Lee at In His Steps Foundation, [email protected], 330-528-1785.