Appreciated securities – an excellent gift
Your gift of appreciated securities to The Wellness Community is an easy and prudent way to gain substantial tax benefits. Most gifts of appreciated securities that you have held long term (more than one year) are fully deductible at current fair market value, and you do not incur a tax on unrealized capital gain.
The Most Cost-Effective Gift
As the chart below illustrates, a direct donation of stock to The Wellness Community of Greater St. Louis is the most cost-effective method when compared with a gift of cash or the sale of securities followed by a gift of the proceeds.
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Give $10,000 Cash
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Sell $10,000
in Securities and Give Cash
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Give $10,000 in Securities Directly
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Fair market value of gift
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$10,000 cash
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$10,000 sale proceeds
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$10,000 in stock
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Cost basis
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$10,000 cash
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$2,000 in stock
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$2,000 in stock
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Capital gain
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$0
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$8,000 from sale
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$8,000 avoided
|
|
Federal capital gains tax
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$0
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($1,200) due to IRS
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$1,200 avoided
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Income tax savings
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$4,000
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$4,000
|
$4,000
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Total tax savings
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$4,.000
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$2,800
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$,5200
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*Above illustration assumes a 15 percent capital gains tax and a 40 percent combined federal and state income tax bracket.
Wise time to donate securities
Consider a gift of appreciated securities whenever you prefer not to incur capital gains tax, such as in these circumstances:
- When a takeover is contemplated
- When you wish to upgrade your portfolio
- When you wish to donate cash or holdings in your closely held corporation
- When you wish to increase your cost basis in a stock you intend to hold
- When you want a higher yield
Multiply your gift
Many corporate matching gift programs will match gifts of securities made by employees, their spouses, retirees and directors. Please check with your company’s human resources office to determine if it will match your gift. If so, please obtain the appropriate form from the company and forward to The Wellness Community.