Benefits of donating stock

One method of charitable giving that's often overlooked is the donation of appreciated investments such as stocks, bonds or mutual funds. A cash donation may be tax deductible, but a donation of an appreciated security is more tax-efficient because it allows the donor to avoid capital gains taxes.

For example, let’s assume that Mary and Bob purchased 50 shares of Coca-Cola stock several years ago and paid $40 per share. The stock is worth $70 per share today. The total value of their shares is $3,500, and there is a capital gain of $1,500. If they were to sell these shares, they would have to pay capital gains tax on the gain.

For all but those in the lowest tax brackets, the current capital gains tax rate is 15 percent for long-term gains (investments held for at least one year). This means that if they sold all their shares, Mary and Bob would have a federal tax bill of approximately $225.

Long-term capital gains tax rates are scheduled to increase to 20 percent in 2013, meaning the taxes on the above example would be $300 at that time.

Mary and Bob decide they would like to give $3,500 to charity. Rather than writing a check, they donate their stock. They get the same tax deduction for that $3,500 gift as they would if they had written a check but they avoid the capital gains taxes and forgo the commission they pay to a broker.

Other considerations:

For more information about donating appreciated stock to Akron Children's Hospital, contact Gretchen Jones, director of principal giving, at 330-543-4167 or gjones@chmca.org.

Benefits of donating stock
Published: March 20, 2012
Publication: Children's Progress
Issue: Winter

Bookmark and Share

Contact Us

330-543-1000 (operator)

330-543-2000
(8 a.m.-4:30 p.m.)

E-mail

find a location
Find a location Type the first 3-5 letters of a specialty, service or location:
Or, view: a map, a list of all locations, locations by city or locations near me.
find a doctor
Find a doctor Type the first 3-5 letters of the name, location or specialty:
Or, view a list of all doctors by name, location and specialty.