Stock Contributions

Consider Donating Appreciated Stocks/Bonds/Mutual Funds for more efficient giving

With the recent increase in the stock market, you may want to consider donating stock, bonds or mutual funds that have appreciated to fulfill your Estimate of Giving or otherwise make a gift to the Church. Gifts of stock can provide donors with a double tax benefit. First, you are able to claim a charitable donation on the current amount of the donated stock, not just the amount you originally paid for it. Second, you do not pay taxes on the appreciated value of the stock.

Here is an example of how this would work. Let us assume you want to make a $10,000 contribution to the Church. You also have 200 shares of XYZ stock that is currently worth $10,000 and you paid only $1,000. The stock went from $5 to $50.

• If you sell the stock, you will pay $1,350 in tax ($9,000 gain times a 15% long-term capital gains tax rate – note that the capital gains rate could be as high as 24% depending on your tax bracket), leaving you $8,650 to contribute to the Church.
•  If you give the shares to the Church, you get a tax deduction for the full $10,000 (the fair market value), the Church gets $10,000 instead of $8,650 and there are no capital gains taxes due. You and the Church win.

There are a few rules to remember:

• You must have owned the stock for more than a year. Otherwise, you only get to deduct the basis, not the current fair market value.
• The value of the contribution is the average of the high and low prices for publicly held stock on the day of transfer.
• There are some limits on the deductibility of gifts of appreciated property. This limit is 30% of your adjusted gross income. Amounts that you can't use in the current year can be carried forward to be used in future years.
• This strategy can be used for other forms of appreciated property, but you should consult with your tax advisor.

There can be some tax consequences, so it makes sense to consult your tax advisor. Consider this approach to help Peachtree and save taxes.

Should you decide this is something you might want to do, please contact Lynn Dawson ldawson@peachtreepres.org, in the finance office at 404-842-5841, to get Peachtree's Account# and DTC# required for a broker to broker transaction. This is a fairly easy way to make the transfer without all the paperwork.

Important: Peachtree has made some changes to their account, so please call or email Lynn Dawson in the Finance Office for the new information BEFORE making a stock donation.