Tax Advantages of Donating Appreciated Stock to the Ruth Institute
Here is a unique way to help the Ruth Institute. If you have stock that has appreciated in value, you may be able to donate it to the Ruth Institute and receive great tax advantages for doing so. The general idea is that when you donate appreciated stock to a charitable organization, you can write off the stock on Schedule A at the market value, and you don’t have to pay capital gains on the gain (neither does the charity). For example, according to the Wall Street Journal:
You also can give appreciated stock to charity. If you’ve held it for more than one year you may take a charitable tax deduction for the market value of the stock, and neither you nor the charity has to pay capital-gains taxes when the stock is sold. The combination can result in a bigger deduction (and more tax savings) for you and a bigger gift for the charity than if you sell the stock, pay the taxes, and donate the net proceeds.
Sandra Block at Kiplinger.com has this to say about it:
If you’re in a charitable mood, consider donating appreciated securities — stocks or mutual funds — instead of cash. When you give $1,000 in cash, you get to deduct $1,000, and that saves you $250 in the 25% bracket. (Any state-income-tax savings are gravy.)
But let’s say you have $1,000 worth of mutual fund shares that you bought more than a year ago for $500. If you sell the shares, you’ll owe $75 in tax on the profit, even at the preferential 15% capital-gains rate. But if you donate the shares, the charity gets the full $1,000 (it doesn’t have to pay tax on the profit when it sells), you avoid the $75 tax bill, and you still get to deduct the full grand. It’s a win-win-win situation.
For those who would like a more concrete example, Wells Fargo Advisors has a chart with examples from two different tax brackets. Click here to see it.
If this sounds like something you would like to do: first, speak to your tax advisor about it to make sure this fits with your tax and other financial goals. After doing so, call our office at for more information. Thank you!
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