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|Subject: In Kind Charity Giving||Date: 5/24/2013 10:36 PM|
|Author: pauleckler||Number: 72275 of 75383|
With the stock market setting new highs, it can be a good time to consider donating highly appreciated stock to your favorite charity. When the stock is held long term, the full market value of the donation is deductible and no capital gains taxes are due. Hence, you save the capital gains taxes compared to a cash gift.
I checked with my broker Fidelity and learned they will transfer shares from your account to another brokerage account for free. You fill out paperwork with a signature guarantee designating the number of shares to be transferred and identifying the receiving account.
IRS Publication 526, p 11 (available on the IRS.gov website).
Capital Gain Property
Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. Capital gain property includes capital assets held more than 1 year.
. . .
Amount of deduction – general rule. When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property.
Other assets can also be donated for a charity deduction, but the rules can be complex in some cases. Publication 526 covers it all.
I presume the stock transfer method would also work for gifts to children or grandchildren, etc, but then the tax treatment is different.
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