Gifting stock is a smart way to give. A donation of appreciated stock can be up to 20% more valuable than selling and donating the cash, allowing you to make a bigger impact and save on your taxes.
Gifting stock avoids federal capital gains tax and most donors can also claim an income tax deduction for the stock's full market value (state & local income tax deductions may also be available in some areas).
When you give appreciated stocks directly to charity, your gift can be up to 20% larger because you avoid the taxes you’d incur from selling and donating the cash. This means more money going to the work that you support.
Whether you want to do it yourself or get help from your financial advisor, donating stock takes as little as ten minutes with our online tool.
The table below shows how your dollar goes further by gifting stock. This direct donation of $50,000 in shares of stock is worth nearly $3,000 more than selling the stock and donating cash.
Current fair market value
Fair market value is the current price of the stock.
Federal capital gains tax
A capital gains tax is a tax on the profit made from the sale of a non-inventory asset like stock. Depending on the filer’s marital status and income, the federal minimum for a capital gains tax is as high as 20%(opens in new window) on long-term holdings (for example, stock held for more than one year).
State capital gains tax
States have their own methods of taxing capital gains. This includes taxing capital gains as income, handling them separately, or not taxing them at all. It's always a good idea to confirm the rules in your state with a qualified tax advisor before entering into any transaction.
Amount charity gets
Income taxes avoided due to charitable deduction
The information above assumes an original cost basis of $25,000 for a single person living in the State of California with an income of $250,000. It also assumes all realized gains are subject to the federal long-term capital gains tax rate of 15%, a Net Investment Income Tax of 3.8%, and a marginal California state income tax rate of 9.3%. It does not take into account other surtaxes or local taxes that may be applicable. The information here is provided for educational purposes only and is not intended to provide, and should not be construed as providing, legal or tax advice.
More than 200 nonprofit organizations use FreeWill to make stock donations easier.
