Most people think of writing a check when they want to make a charitable gift. However, gifts may be made with many types of property. You can receive significant tax advantages by donating securities rather than cash.
Many donors have found that they achieve substantial savings by giving appreciated securities (stocks or bonds that have grown in value since they were originally purchased). You may deduct the full market value of appreciated securities, and avoid any obligation to pay capital gains taxes.
As part of her investment portfolio, Maria owns oil company stock bought in her name for $1,000 by her grandfather. The stock is now worth $5,000. As an environmentalist, Maria is not comfortable holding oil company stock, but is reluctant to pay capital gains taxes on the profits, should she sell the stock. At the same time, Maria is planning a gift to MRG Foundation of an amount equal to the value of the stock.
Maria has three options for giving:
Option three, giving the stock itself as the gift, results in the lowest cost of giving because Maria receives a deduction for the full current value of the stock while also avoiding tax on the capital gain. In effect, she saves taxes twice by giving the appreciated stock to MRG. And she gets the added benefit of knowing that she's turned oil company profits into something that helps rather than hurts the environment. As a charitable foundation, MRG Foundation can sell the shares and not pay taxes on the gain.
Securities must be received by MRG Foundation in the calendar year for which you intend to take the tax deduction (in other words, by December 31st). It is best to allow six weeks for the transfer.
Have questions and want to make a stock donation to MRG Foundation? Contact Sheryl Sackman via email or call her at (503) 289-1517.
Interested in socially responsible investing? Visit www.socialinvest.org
MRG Foundation is a 501(c)(3) tax-exempt organization. Our federal tax identification number is 93-0691187.