GIVE STOCKS
Contribute Stock or Mutual Funds
Donating appreciated securities, such as stocks or mutual funds, to Faith of a Mustard Seed is a tax-efficient strategy. Many donors opt to give long-term appreciated assets, which can offer significant tax benefits.
The benefits of contributing stock or mutual funds may include:
• Avoiding federal and state taxes on the capital gains.
• Receiving an income tax deduction (federal and in most states) for the full market value of the gift, provided you itemize deductions on your tax return and have held the assets for one year or more.
• Making a more substantial gift at a lower original cost to you.
Example of a $5,000 Stock Gift:
• You bought stock years ago for $1,500, which is now worth $5,000. By donating it to us, a 501(c)(3) charitable organization, you avoid recognizing the $3,500 capital gain.
• Federal Tax Savings: You avoid paying 15% federal capital gains tax, which amounts to $525.
• State Tax Savings: Assuming a 5% state capital gains tax rate, you save an additional $175.
• Charitable Income Tax Deduction: By itemizing deductions, you can claim a $5,000 charitable deduction, resulting in $1,400 in federal income tax savings (assuming a 28% tax bracket).
• State Income Tax Savings: If your state allows charitable deductions, a 5% state income tax rate provides an additional $250 in savings.
Overall, donating the stock or mutual fund allows you to make a $5,000 gift while realizing total tax savings of $2,350. This is more advantageous compared to a direct cash donation of the same amount ($1,650 in tax savings) or selling the security first ($1,419 in tax savings).
Clearly, donating long-term appreciated securities is a tax-efficient strategy.
Important facts
According to the guidelines:
• To deduct a charitable donation, you must itemize your tax return.
• Ensure you have owned the security for at least one year before donating, or your deduction will be limited to the original purchase cost.
• You can deduct up to 30% of your adjusted gross income (AGI) for charitable donations. Any unused deduction can be carried forward for up to five years.
• Consult your financial planner or tax advisor to assess the tax benefits of donating appreciated securities and to ensure the accuracy and relevance of this information.
For instructions on how to transfer your securities to Faith of a Mustard Seed, please contact our national program support center.
GIVE STOCKS
Contribute Stock or Mutual Funds
Donating appreciated securities, such as stocks or mutual funds, to Faith of a Mustard Seed is a tax-efficient strategy. Many donors opt to give long-term appreciated assets, which can offer significant tax benefits.
The benefits of contributing stock or mutual funds may include:
• Avoiding federal and state taxes on the capital gains.
• Receiving an income tax deduction (federal and in most states) for the full market value of the gift, provided you itemize deductions on your tax return and have held the assets for one year or more.
• Making a more substantial gift at a lower original cost to you.
Example of a $5,000 Stock Gift:
• You bought stock years ago for $1,500, which is now worth $5,000. By donating it to us, a 501(c)(3) charitable organization, you avoid recognizing the $3,500 capital gain.
• Federal Tax Savings: You avoid paying 15% federal capital gains tax, which amounts to $525.
• State Tax Savings: Assuming a 5% state capital gains tax rate, you save an additional $175.
• Charitable Income Tax Deduction: By itemizing deductions, you can claim a $5,000 charitable deduction, resulting in $1,400 in federal income tax savings (assuming a 28% tax bracket).
• State Income Tax Savings: If your state allows charitable deductions, a 5% state income tax rate provides an additional $250 in savings.
Overall, donating the stock or mutual fund allows you to make a $5,000 gift while realizing total tax savings of $2,350. This is more advantageous compared to a direct cash donation of the same amount ($1,650 in tax savings) or selling the security first ($1,419 in tax savings).
Clearly, donating long-term appreciated securities is a tax-efficient strategy.
Important facts
According to the guidelines:
• To deduct a charitable donation, you must itemize your tax return.
• Ensure you have owned the security for at least one year before donating, or your deduction will be limited to the original purchase cost.
• You can deduct up to 30% of your adjusted gross income (AGI) for charitable donations. Any unused deduction can be carried forward for up to five years.
• Consult your financial planner or tax advisor to assess the tax benefits of donating appreciated securities and to ensure the accuracy and relevance of this information.
For instructions on how to transfer your securities to Faith of a Mustard Seed, please contact our national program support center.
