Gifting appreciated stock to charity
Provided by RBC Wealth Management
and Dave Dupont
If you are considering a charitable contribution this year, it is in your best interest to seek out the most effective manner in which your money can work for you. Gifting appreciated stock is one of the most effective means of tax savings available — courtesy of today’s U.S. tax laws.
The benefits of gifting appreciated stock are:
• The satisfaction of knowing your money is invested in a cause important to you.
• Avoidance of capital gains taxes on the stock.
• Eligibility to receive an income tax charitable deduction for the full fair market value of the stock at the time of the gift.
To qualify for these special tax advantages, the security must have been held for at least one year. A gift of stock in certificate form should be postmarked by December 31 or your financial advisor can arrange for a year-end gift of stock from your account.
Your gift of appreciated stock is fully deductible up to 30 percent of your adjusted gross income. For example, if your adjusted gross income is $100,000, up to $30,000 of long-term appreciated stock and other capital gain property may generally be deducted, although high-income donors may be subject to a partial phase-out of itemized deductions. Any excess can generally be carried forward and deducted over as many as five subsequent years.
How Giving Away $10,000 in Stock Can Benefit You
Take a look at the tax savings of donating securities versus a cash gift. The chart below assumes you wish to donate shares of stock worth $10,000 that you purchased for $2,000 several years ago.
The information included in this article is not intended to be used as the primary basis for making investment decisions. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC
RBC Wealth Management does not provide tax advice. All decisions regarding the tax implications of your investments should be made in connection with your independent tax advisor.
