Don’t panic – but the end of the year is quickly approaching.
As the year creeps closer to a close, the number of tasks requiring planning increases. That’s why Financial Planning Month is recognized in October – to beat the mad rush of holidays and other commitments, encouraging people to plan now and play later.
At the end of each year, many people tend to feel more generous. Year-end tax benefits may drive it, but the end of the year is also when many people reflect and take stock of their lives. But few people know that there are some clever ways to increase the impact of their donation and yield a more significant benefit to the charity and themselves. This easy life hack is known simply as donating stocks.
Donating securities is one of the most effective ways to give from a tax planning perspective. Despite being the most tax-smart way to give, it is not well understood or even widely used. Because this is an excellent hack for givers and receivers, the National Foundation for Cancer Research (NFCR) keeps it easy for everyone – starting with understanding the benefits.
Worth more, cost less
Donating stock that has appreciated for more than a year allows donors to give 20% more than if they sold the stock and then made a cash donation. The reason is simple: avoiding capital gains taxes. The maximum federal capital gains tax rate is 20 percent on long-term holdings. But if they donate the stock directly to a charity, there’s no capital gains tax to pay. To make the deal even sweeter, donors are still eligible to deduct the full fair-market value of the asset donated from your income taxes, up to the overall amount allowed by the IRS. And remember that your appreciated assets can also include assets that are not publicly traded, like restricted stock or bitcoin.
Reduce future capital gains
Holding a stock for a long time can set the stage for substantial gains when it’s time to sell. If investors donate some of their appreciated shares, buying new shares will then reset their cost basis at the current, higher price. This step will reduce future capital gains tax exposure if the stock continues to grow in value.
It’s easy to do
Donating stock sounds like a headache – but rest assured it is about as easy as it gets! It only takes a matter of moments to donate electronically to many worthy charities.
For those interested in donating stocks to support world-renowned NFCR-funded researchers, please complete an electronic stock transfer using the details below:
Attn: Guillermo Garcia
Morgan Stanley
1747 Pennsylvania Ave, NW Suite 700
Washington, DC 20006
DTC#: 0015
Acct#: 850-023136
Broker’s Phone Number: 202-292-5459
Please get in touch with NFCR via mail, email, fax, or telephone regarding the purpose of the gift when the transfer is made.
NFCR Postal Address:
5515 Security Lane, Suite 1105
Rockville, MD 20852
NFCR Email: info@nfcr.org
NFCR Fax: 301-654-5824
NFCR Phone: 1-800-321-CURE (2873)
Additional Reads You May Enjoy:
Charitable Giving and Tax Benefits
Estate Planning to Leave a Legacy
Giving for Good—Donating IRA, Stock & Other Financial Assets
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