As we celebrate this season of giving, many will find themselves looking for ways to share special gifts with some of their favorite charities. And while it’s always considered better to give than to receive, with some savvy planning, you can actually do both!
Donating gifts of stock to your charity of choice rather than cash can be a smart option in regards to tax-planning. Here are four great reasons from Fidelity Charitable that you should give stock donations a try.
You can give more! According to Fidelity Charitable, “by donating stock that has appreciated for more than a year, you are actually giving 20 percent more than if you sold the stock and then gave the cash donation.” Plus, if you donate your stock directly to a charity, there is no capital gains tax to pay! This also means you are able to deduct the full fair market value of the asset you donated from your income taxes (up to the overall amount allowed by the IRS of course).
You can potentially reduce future capital gains. Many investors want to hold on to stocks they love most for the long term, and any appreciation of the stock’s value will confirm their belief in it… but it can also set the stage for substantial gains when the stock is sold. Fidelity Charitable says, “Consider donating some of your appreciated shares and then buying new shares to reset your cost basis at the current, higher price. This will reduce your future capital gains tax exposure if the stock beings to grow in value.”
You can give your portfolio a health check. If a review of your investments’ gains and losses shows that it’s time to rebalance your portfolio, donating stock can give your portfolio the health check it needs! By establishing a donation strategy, you put your capital gains to work funding your philanthropy. Be sure to talk with your advisor about which assets you might be able to put to better use.
You can donate stocks without headaches… whew! Donating stock is surprisingly easy… especially when you’re using a donor-advised fund. A donor-advised fund is like a charitable investment account which can be used exclusively to support charities you care about. Instead of donating multiple blocks of stock to multiple charities, you can make one donation to your Giving Account and then use the account to distribute your donations!
Donating stock is a way to give back to your community in a huge way by increasing your gift and tax deduction. Please contact Morgan Hargrove Emahiser at (205) 945-0018 ext. 306 for more information about how to donate stock today with Childcare Resources.
Prefer to help in a more traditional way?
Make a donation to support our Supplemental Child Care Program and help provide affordable child care for a working family in our community.
Donate an item from our wish list to help offset agency operational costs, allowing dollars raised to go further than ever to support our programs and services.
Spread the word of our mission to make quality care and education of children happen in our community.