Maximizing Your Gift – Part II

Last week I talked about cash donations to the church.  This week’s installment covers stock gifts.  Stock gifts are a great option if you have stocks that have appreciated (the more the better)!  Let’s say you have 100 shares of Acme Widgets that you bought 10 years ago for $1500 and is now worth $4000.  If you sell the stock you have a $2500 capital gain to pay federal and state tax on, let’s say $600 tax, and you could give the net proceeds from the sale ($3400) to the Church.  If instead, you give the stock directly to the church, First UU would get the entire $4000 (less a nominal amount for brokerage commission).  You incur NO capital gains tax.  In addition, if you itemize deductions you can deduct $4000 rather than $3400, reducing your taxes even further.

Don’t worry about the situation where the stock value exceeds the amount you pledged.  Using the above example, if your pledge was $2500, you could ask for the $1500 excess to be applied to the following year’s pledge.

Another idea to take advantage of the stock gifts to charity is to participate in a Charitable Gift Trust.  Many of these exist.  In this scenario, you give your appreciated stock to the gift trust, and then direct the trust to send money to charities you choose.  Again, you avoid capital gains tax.  You get the charitable deduction when you give the stock to the trust (you do not get a deduction when the trust gives money to the charity).  But you can use the gift trust money to support all of your charities, usually with a minimum dollar amount like $50.  The gift trust does charge an annual service fee – the fee structure varies between trusts.  Also, gifts to the trust are final.  Typically the enrollment process includes instructions for how remaining trust money is given away at death.

If you have any questions or would like further information, please let me know.

Don Stimpert, Assistant Treasurer
email Don at don.stimpert@gmail.com 

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