Gifts of Securities Giving stock to a charitable organization is a great way to expand the amount you can afford to donate. If you have owned the stock for more than a year, you get a tax deduction for the gift, and you avoid paying any capital gains tax on the increase in value of the stock. When you donate property, you can deduct the "fair market value," which is the average of the highest and lowest trading price for the stock on the day you make the transfer.
Example: If you purchased some stock in the past for $1,000, and it is now worth $10,000, an outright gift of the stock to Spectrum will result in a charitable contribution deduction of $10,000. In addition, there is no tax on the $9,000 appreciation in value.
If you own the actual stock certificates then you can simply fill in the form on the back of the stock certificate and give it the organization. If your shares are held in a brokerage account, you can ask your broker for assistance in the transfer. In order to take full advantage of the tax deduction, you will need to itemize your deductions. If you are donating a lot of shares, you could run into the limits on charitable giving. Essentially your deduction can't be higher than 30% of your adjusted gross income. Anything that you can't deduct in the first year can be carried forward for up to five years.
If you need Spectrum?s account information to make a transfer, please contact Paul Smith, Financial Director, at 802-864-7423, or email psmith@spectrumvt.org. |
