Gifts of Appreciated Stock

With many stock portfolios looking quite healthy after solid gains in the public equities markets, gifts of appreciated stock can be a fantastic way to give to OMF, especially when the gifted shares would otherwise be subject to sizeable capital gains taxation. Gifts of stock, which must come from non-qualified stock accounts (i.e. not your IRA), let you forgo capital gains altogether and double up on the benefits you’re receiving from Uncle Sam. This is because you get to forgo capital gains taxes AND write off the charitable contribution which, if you were to sell the stock yourself, pay the taxes, and donate the net proceeds, you wouldn’t be able to do. 
 
Says Laura Scharr-Bykowsky, CFP, MBA, of Ascend Financial Planning: “It’s true that a check is the easiest way, but if an investor wants to make a gift and help themself to a bigger tax break, there is a better option. If an investor has held an appreciated stock or mutual fund for more than one year, they can donate those securities to a charity and receive a tax deduction for the fair market value of the securities, and eliminate any capital gains assessments on the future sale of the securities. In some cases that could be as much as 23.8% in addition to a savings on State income tax.”
 
In general, the amount of your deduction is limited to 30% of your adjusted gross income, but you can carry forward amounts above that for up to five years. You are advised to talk to your accountant to fully understand the tax implications of any gift of stock or cash and to understand any potential implications of the re-installment of the "Pease" limitation, which reduces your total itemized deductions by 3% of the amount that your adjusted gross income exceeds $250,000 (for single filers) or $300,000 (for joint filers).