Have you considered donating securities (stocks and mutual funds) as an alternative to cash? If you itemize your tax deductions and if your securities have been held for over a year, there might be additional tax advantages as well.
If your securities have increased in value since you purchased it, it is better to donate the securities to a nonprofit organization. Benefits when securities have increased in value:
- When you donate securities that have appreciated in value, you do not have to pay federal or state tax on the capital gains.
- You deduct the full market value of the securities from your income taxes. Please note that tax laws consistently change, and it is advised to check with your tax advisor.
If your securities have decreased in value since you purchased it, it is better to sell the securities first and then donate the cash. Benefits when securities have decreased in value:
- When you sell securities at a loss, you’ll be able to utilize the loss to offset capital gains or deduct the capital loss versus income up to $3,000. Please note that tax laws constantly change, and it is advised to check with your tax advisor.
- You will still be able to deduct the cash donation.
To evaluate the tax advantages available to you, contact your financial or tax adviser. Whether there are tax advantages or not, donating securities may be an alternative.
If you are considering a gift of securities, email Mary Rhoades or contact her at 415.351.4055, and we will give you our stockbroker’s contact information.