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Gifting Securities To MRG Foundation

Tax advantages to donating securities rather than cash

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.

Often, there is a greater tax advantage to making non-cash gifts. 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.

Example

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 charitable gift to MRG Foundation of an amount equal to the value of the stock. The table illustrates the financial impact of her gift when made with 1) cash proceeds from the sale of the stock, 2) cash, or 3) the stock itself.

As you can see, option three results in the lowest cost of giving. This is 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. As a charitable foundation, MRG Foundation can sell the shares and not pay taxes on the gain.

Gifting securities to MRG Foundation is simple...

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.

Consult with your tax and investment advisors about the amount and types of securities you wish to give.

• Call MRG Foundation to review the process at 503/289-1517.
• If you are gifting mutual fund shares, the mutual fund will usually be happy to set up a courtesy account for MRG Foundation. Ask the mutual fund or your investment advisor to send the new account forms to MRG Foundation. Then prepare a letter of instruction to the mutual fund, asking them to transfer the designated number of shares to the new MRG Foundation account, at no sales fee.
• If you hold your own stock certificates, you can safely transfer those certificates to MRG Foundation's investment account at Charles Schwab.
• If you have an investment account of your own at Charles Schwab, draft a letter of instruction to Schwab, listing your account number, the number and type of securities you wish to transfer, and the instructions to transfer to the MRG Foundation's account.
• If you have an investment account at another brokerage, write a letter of instruction to your broker with your directions to transfer the securities to MRG Foundation's account at Schwab.
• Have questions? Ready to gift securities to MRG Foundation? Contact MRG Foundation at 503/289-1517 or email us.
• 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.