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Dec 14, 2016

Why More Investors Are Donating Stock to Charity

Wall Street article written by Chana R. Schoenberger


As the stock market reaches new growth more investors are looking which securities have gone up the most to donate them to charity. By electing Trump, there is more certainty that tax rates will be lower in the next years. That means investors who donate appreciated stock before the end of December will be able to deduct their gift’s value from 2016 tax bill that could be higher that their 2017 tax bill.

It is almost always better to donate the stock rather than selling the stock and giving cash in the taxable account. That is because investors who sell appreciated stock held in the taxable account have obligation to pay taxes on those gains. They would get a tax deduction for donating those incomes. If those investors instead donated appreciated stock, they would pay no taxes on the gains and get a tax deduction for the full market value of the shares.

It is different if stock lost value. In that case, investors may want to sell the shares at a loss and donate the cash income since they could write off that loss against another capital gain.

Retrieved from: http://www.wsj.com/articles/why-more-investors-are-donating-stock-to-charity-1481511901