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Securities

Donating long-term appreciated securities — rather than selling the assets and then donating the cash proceeds — is one of the easiest ways for donors to increase their charitable dollars and maximize their impact on the community.

Long-term appreciated securities include stocks, bonds, or mutual funds that have realized significant appreciation over at least one year.  These gifts can be deducted at full market value, up to 30% of your adjusted gross income, with the ability to carry forward amounts exceeding your allowance for up to five years.

The below table illustrates this win-win situation for both individuals and the community1:

  Donate Stock Directly to LVCF Sell Stock and
Donate Cash Proceeds
Cost of securities $100,000 $100,000
Current fair market value $250,000 $250,000
Long-term capital gains
(Market Value less Cost)
$150,000 $150,000
Capital gains and Medicare surtax paid2 $0 -$35,700
Charitable Contribution $150,000 $114,300
Additional Amount Donated2 $35,700 ---

 

1 This is a hypothetical example for illustrative purposes only. It assumes the taxpayer will be itemizing deductions.  State and local taxes are not taken into account. Please consult your tax advisor regarding your specific legal and tax situation. Information herein is not legal or tax advice.

2 Assumes all realized gains are subject to the maximum federal long-term capital gain tax rate of 20% and the Medicare surtax of 3.8%. Does not take into account state or local taxes, if any.

Information about donating appreciated securities is available from the Community Foundation by contacting Erika Riddle Petrozelli, Director of Donor Services, at 610-351-5353 or erika@lvcfoundation.org.

 

ASK ERIKA | Ask me how the Community Foundation can help you and your clients create a lasting legacy and make a difference in the community....

Erika Riddle Petrozelli, CPA
Director of Donor Services

840 West Hamilton Street, Suite 310, Allentown, PA 18101
610 351-5353   Ext. 13 | Erika@lvcfoundation.org