Take stock: make a huge difference to your favorite charity and save yourself lots of $$$
It bears repeating: an ideal asset for a charitable donation to your favorite nonprofit is stock. To be more specific, appreciated publicly traded stock that has been held for more than one year.
You can receive a double federal tax benefit for gifts of stock. Under federal tax law, the  long-term capital gain is excluded from taxable income and  the charitable contribution deduction is the fair market value of the stock. It can make a huge difference to you, the donor.
Three rules to keep in mind:
- You must have owned the stock for more than one year. Otherwise, you only get to deduct the basis, not the current fair market value.
- The value of the contribution is the average of the high and low prices for publicly held stock on the day of transfer to the charity.
- There are limits on the deductibility of gifts of appreciated property. This limit is 30% of your adjusted gross income. Amounts that you can’t use in the current year can be carried forward to be used in future years. It’s called a “five year carry forward.”
Keeping those rules in mind, though, stock is a very tax savvy gift. More soon!
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 firstname.lastname@example.org; and through his website at www.gordonfischerlawfirm.com.
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