Stock Gifts

stock giftsOne of the most satisfactory ways for a donor to give a gift to a 501(C)3 charitable organization, is to use appreciated stock. Giving stocks, bonds, and mutual fund shares that have increased in value (and which the donor has owned for more than one year) provides greater tax benefits to the donor than giving cash. Not only can the donor deduct the full market value of the securities but also avoid paying capital gains tax on the appreciation.  Securities that have decreased in value should first be sold by the donor and the cash proceeds donated. The donor can then deduct the capital loss to offset any capital gain.

For year-end donations, be sure the stock transfer is completed on or before December 31 to make it count for the current tax year. For electronic transfers from your brokerage account, the donation is recorded on the day it is received by The Friends (not when you approve the transfer). With increased year-end activity at brokerage firms, you should plan your year-end stock gifts as early as possible and have ongoing communications with your broker to ensure that the transfer takes place. The gift value for Internal Revenue Service purposes will be the average of the high and low selling price of the securities on the date the gift is received by The Friends.

Please contact Greg Giles, Vice President of Development and Community Engagement. He will provide you or your broker with instructions for transferring stock. Greg can be reached at 651-366-6499 or greg@thefriends.org.

For more details on the tax rules of charitable giving, including stock valuation, see IRS Publications 526 and 561.