One of the most tax-efficient ways to benefit the Foundation for Missions is with a charitable gift of appreciated stocks, bonds or mutual funds. This method of giving has become increasingly popular in recent years.

Why has this method become so popular? In an era of ever rising income tax rates, the tax benefits of donating appreciated assets have never been better.

  • Any long-term appreciated securities with unrealized gains (meaning they were purchased over a year ago, and have a current value greater than their original cost) may be donated to a public charity and a tax deduction taken for the full fair market value of the securities — up to 30% of the donor’s adjusted gross income.
  • Since the securities are donated rather than sold, capital gains taxes from selling the securities no longer apply. The more appreciation the securities have, the greater the tax savings will be.

The table below illustrates potential tax savings for a couple with an AGI of $450,000, filing jointly, making a direct donation of a long-term appreciated security. The couple’s cost basis is $10,000, and their long-term capital gain is$40,000.

Donate Stock: Contribute securities directly to charity
Current fair market value of securities $50,000
Capital gains and Medicare surtax paid2 (23.8%) $0
Charitable Deduction $50,000
Value of Charitable Deduction(Assumes donor is in the 39.6% federal income tax bracket) $19,800

That’s right: donating the appreciated stock will save this generous couple $19,800 in tax! And since no capital gains tax is paid the full $50,000 benefits the Foundation for Missions!


Gifts of Stock or Other Appreciated Assets for Lifetime Income

If you need lifetime income from your stock but would still like to make a gift to the Foundation for Missions we can set up a Charitable Remainder Trust (CTR) for you. It’s the perfect vehicle to which to donate appreciate stock or real estate. We once had a generous advocate donate a piece of raw land he purchased in the 1950s for $10,000. Today’s value of the property was $500,000. The raw land produced no income, only tax liabilities. We were able to arrange a donation to a CRT that paid the donor $45,000 per year for the rest of his life. This income was a tremendous help to him for his living expenses. CRTs work best when the donated value is $250,000 or greater. In addition to acquiring a lifetime income the donor also received a sizable income tax deduction for his gift.

If you are prayerfully considering a donation of appreciated stock, please don’t hesitate to call us. Our financial experts will provide you with a written estimate of your tax savings that you can share with your accountant.

Contact us at the Foundation for Missions office today!
Office Phone: 407-730-3364