Charitable Donation? – Think Appreciated Stock

BCR Wealth Strategies |
Categories
Author - Sandra Cleveland

Now is a great time to review your after-tax investment portfolio for appreciated stock holdings to use for charitable donations.

Here are some reasons why it could be a great time now:

  • The long-term market growth, especially in US stock holdings, has provided significant investment gains, which provides you with the means to make an appreciated stock donation
  • Donating appreciated stocks results in no capital gains to you
  • You are eligible to deduct the full fair-market value of the asset you donate
  • You receive a tax deduction for the gain that would have been taxed to you
  • If you want to continue to invest in this holding, you can donate your appreciated shares and then buy the same security with a higher cost basis, which will reduce your future capital gains tax
  • If your portfolio is out of balance and you want to optimize for risk, you can
    • donate the appreciated holdings which moves your portfolio closer to your target and
    • accomplishes your charitable intent while
    • avoiding paying taxes on the capital gains

It is important to seek the advice of your financial advisor and your tax accountant to ensure you are maximizing this opportunity.

You will see the advantage from this decision when you complete your 2021 tax return, and your charitable organization will thank you for your generosity now.