Appreciated Securities

For many individuals, their most common appreciated assets are marketable stocks and bonds. If you are holding stocks, bonds, or mutual fund shares that have risen in value, a gift of appreciated securities to The Shelter for Abused Women & Children may be beneficial for both you and the individuals and families served by The Shelter.

By transferring your appreciated securities to The Shelter, you eliminate the capital gains tax typically paid on your growth, and receive a tax deduction for your gift. Many times you can leverage a larger donation if you use an appreciated asset instead of cash to make your gift.

Example: You own stock with a fair market value of $100,000 that you purchased for $30,000.

By contributing that stock to The Shelter for Abused Women & Children, you may claim a charitable income tax deduction for the full $100,000. In addition, you will avoid liability for the taxes on the $70,000 capital gains upon transfer of the stock. If you sell the stock first, and then contribute the proceeds to The Shelter, you are subject to the capital gains taxes on $70,000.

By donating appreciated stock instead of cash, you have delivered $100,000 to The Shelter, and secured a tax deduction in the same amount, at a cost to you of only $30,000.

Can you deduct the full amount of your gift?  Yes, within limitations of IRS rulings.

An example: For qualifying individuals or couples, the IRS states that you may deduct gifts of appreciated assets up to 30 % of your adjusted gross income (AGI).

Thus, if your AGI will be $100,000 this year, you could be able to deduct up to $30,000 in gifts of stock. A gift in excess of the 30 % amount is not wasted, however, because the IRS allows you to carry forward excess deductions through the five tax years following the year of your gift.

Your security will be valued by taking the average of the high and low prices on the date of the transfer to The Shelter. If the high bid was $80 and the low was $70, your tax deduction would be based on $75 per share.

If your security is held by your financial advisor, your gift is considered complete when the security reaches our account. If you hold the security yourself and mail it to us, it is based on the postmarked date on the envelope.

IMPORTANT! Do not sell the stock first! Even though you give The Shelter the proceeds as a gift, the IRS will impose capital gains tax on your sale, wiping out the benefits of this arrangement.

For transfer instructions, please contact us at 239-755-3862 or have your financial advisor call or email us for more information on making a gift of appreciated securities to The Shelter for Abused Women & Children at www.naplesshelter.org. Transfer instructions are enclosed.