Appreciated Securities

  • Charitable income tax deduction for full market value
  • Avoid capital gains taxes

Gift of appreciated securities

Joan Beal has always been an avid reader. She purchased 100 shares of when it was still a relatively unknown young company. She paid about $20 per share and her $2000 investment is now worth about $75,000. Joan has been supporting the United Way by giving $1,000 per year through payroll deduction, but has decided to increase her gift to $1,500 this year. If she sells two shares at $750 per share, she will end up paying 25% tax on $1,460 in gains, or about $365 tax on about $1100 of capital gain. If she donates two shares of Amazon worth $1,500, she will avoid $365 of capital gains tax and will get a deduction of $1,500 which, in her 40% tax bracket, will save her another $600 in income tax. Her tax savings totals $965 and the after-tax cost of her $1,500 gift is only $535.

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