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It’s not that hard to give cash or stock to charity

By in Press Enterprise on November 4, 2017

By Teri Parker

With the end of 2017 quickly approaching, now is the time to complete any charitable intentions on this year’s task list.

Many of us have charitable intentions, but often do not follow through with our plans to leave some of our assets to a qualified charity because the task seems too difficult. Often, the perceived complexity and cost of establishing a gifting strategy deters potential donors from following through with their intentions.

There are many ways to donate to a qualified public charity— from an outright gift of cash to a complex trust arrangement. But not all gifting is complex or costly. In fact, the following strategies are tax-efficient and simple to implement.

Gifting highly appreciated stock

Donating long-term highly appreciated taxable securities — stocks, mutual funds, and exchange traded funds that have realized significant appreciation over time — is one of the most tax-efficient ways to give. To qualify for long-term status the assets must be held longer than one year, and there are numerous benefits.

• Capital gains taxes are avoided on the future sale of the securities.

• A tax deduction is received for the full fair market value of the securities up to 30 percent of adjusted gross income (AGI).

• You can significantly increase the amount of funds available for charitable giving because you are not paying capital gains taxes on the gift. You are gifting the full value of the security, not an after-tax net value.

Most banks and brokerage firms require you to sign a letter of instruction to transfer the shares to a charity. Don’t wait until the last week in December to begin this task or it may not happen in 2017. Give yourself a bit of time to request the form, sign it, and have it processed so it is completed prior to year-end.

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