The benefits of donating appreciated securities (either stocks or mutual funds) are tremendous. You are able to avoid paying capital gain tax on the appreciation, and you also get to deduct the full fair market value of the security at the time of gift. This is an excellent way to leverage your gift in support of Muncie Mission’s causes.
As long as you have held the security for longer than 12-months, giving through appreciated securities can work as follows:
Let’s suppose you are planning to give Muncie Mission $2,000. If you are in the 28% tax bracket, your $2,000 gift will reduce your taxes by $560. That is a decent deduction, but you might be able to do even better.
Instead of donating $2,000 in cash, what if you use $2,000 worth of mutual fund shares. If you sold the shares to make a charity donation, you would owe taxes on your gains. If you realized $1,000 gain, you would owe 20% taxes, or $200. If you donated the remaining $1,800 to charity, you would get a $504 deduction. However, if you donated your shares to the Mission you would get a full $2,000 deduction for the donation and avoid paying capital gains taxes. That would amount to two tax breaks in one.
If you are interested in donating securities, there are several ways to make the transfer, electronically being the most common.
After arranging the stock transfer with your financial adviser or broker please call our representative Dean Meyers, Edward Jones, Muncie, IN at (765) 288-4333 or(800) 441-6966. He will provide all of the pertinent details for the transfer of your securities.
Please be sure to contact Frank Baldwin, Executive Director, at the Mission once your receipt has been received. This is very important, especially if the gift has been transferred electronically to our account or a certificate has been issued in the name of Muncie Mission, since your name will not be associated with your donation. We would also like to say “thank you” personally as well as provide you with an acknowledgment letter for your tax purposes.
Please note, individual financial circumstances will vary. As with all tax and estate planning, please consult your attorney or estate specialist.