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Four great reasons to donate appreciated stock to charity

An ideal asset for charitable donations: appreciated publicly traded stock held for more than one year. Under federal tax law there is a double benefit, as [1] the long-term capital gain is excluded from taxable income and [2] the charitable contribution deduction is the fair market value of the stock. I’ve got an example here. Iowa law provides a third benefit – one can receive a state tax credit of 25% of the gift under the Endow Iowa Tax Credit Program. Details about Endow Iowa here.

Yet another benefit: the substantiation rules for gifts of donated securities are more relaxed than for gifts of other type of donated property. Gifts of publicly traded securities do not require an appraisal to document value. This is important, as non cash gifts of more than $5,000 generally require a qualified appraisal by a qualified appraiser, a quite complicated requirement I discuss here.

The value of gifts of publicly traded securities are based on a simple calculation – the arithmetic mean of the highest and lowest selling prices on the date of the gift. More about this topic tomorrow.

Gordon Fischer Law Firm, P.C. is dedicated to promoting and maximizing charitable giving in Iowa. Gordon can be reached by phone at 515-371-6077; by email at gordon@gordonfischerlawfirm.com; and through his website at www.gordonfischerlawfirm.com.

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