Gifts of Cash or Stock
Gifts of Cash
Cash, usually in the
form of a check is the most common form of a charitable gift. Cash
gifts to the CFGC enable donors to claim a current income tax deduction
of up to 50 percent of their adjusted gross income in the year of
the gift, with a five-year carry-forward period if required.
The actual savings from gifts of cash depend on the donor's tax bracket.
Benefits of Giving Stock
Donors who contribute
long term-appreciated securities to the CFGC receive a double federal
tax benefit. Gifts of appreciated securities are deductible at their
full market value if held longer than 12 months. Fair market value
is the average between the high and low trade on the date of the
gift.
The capital gains tax on the stock's appreciation (the difference between the property's cost basis and its present fair market value) is completely avoided. The fair market value of the donated securities can be deducted up to 30 percent of the donor's adjusted gross income, with a five-year carry-forward if required.
Gifts of Appreciated Securities (Stock)
If you have owned a
certain stock for several years, it probably is worth more now than
when you acquired it. Such appreciated assets are tax-smart ways
to establish a fund within the Community Foundation of Greater Chattanooga,
Inc.
Donors who give appreciated assets to the CFGC save on taxes two different ways. First, they earn an income tax deduction based on the asset's current market value and they also avoid the capital gains taxes from the appreciated asset.
Frequently Asked Questions about Giving Stock
Why are stocks important? Stocks are the most valuable
assets Americans own besides their home. Today 60% of all Americans
own stock in some form or fashion. The CFGC receives over 60%
of all gift dollars in the form of stock.
What is the Date of a stock gift? The following are examples of how a date is posted regarding a gift of stock: A donor personally delivers stock certificates and a signed stock power to CFGC on Friday, June 1st. The date of the gift is June 1st. However, if the donor only delivers a stock certificate without the stock power the date of the gift will be posted the day the stock power is received. Both items must be received in order for a gift transaction to be posted.
When stock certificates are mailed, the date of the postmark is the date of the gift provided both documents (stock certificate and stock power are included). If one of the items is missing the date of the gift will be the postmark date of the second item mailed.
When a transfer agent transfers stock, the date of the gift is the transfer date on the certificate.
If a broker transfers a gift of stock; the date of the gift is the date the stock is transferred from the donor's brokerage account to the CFGC's brokerage account. (Note the CFGC has brokerage accounts at almost every local brokerage house.)
How Stock Gifts are Valued? A gift of stock is valued at the average of the high and low on the date of the gift.
What does the CFGC do when they receive a gift of stock? The CFGC sells the stock immediately then issues a substantiation letter, and IRS Form 8283.
What Type of Securities does the CFGC Accept? The CFGC will accept gifts of listed and traded stocks, bonds, and mutual funds. The CFGC may consider gifts of closely held stock and other private equities in accordance with its gift acceptance policy.
Consider supporting a number of charities by donating appreciated stock to the CFGC. The CFGC will distribute the net proceeds to the assigned charity or charities. A portion can also be set aside to initiate a named fund.
