Smart gift planning combines charitable intent with cost-efficient planning techniques. Of critical importance is the kind of asset used to fund the gift. Usually, long-term appreciated property can generate the most favorable tax benefits. The reason: Gifts of such property provide a double benefit—a charitable deduction, in most cases, for the full fair-market value of the property—plus avoidance of any potential capital-gain tax.
The chart below illustrates the additional tax savings from a gift of appreciated assets.
Cash
Appreciated Property
A.
Fair-Market Value
$10,000
$10,000
B.
Cost Basis
10,000
4,000
C.
Capital Gain
0
6,000
D.
Capital-Gain Tax (15%)
0
900
E.
Charitable Deduction
10,000
10,000
F.
Actual Tax Savings (24%)
2,400
2,400
G.
Total Tax Savings (D+F)
2,400
3,300
How It Works
You can send unendorsed stock certificates by registered mail or instruct your broker to make the transfer from your account to the account of the Lewis County Historical Society
You receive and income tax deduction
The Historical Society may keep or sell the securities
Benefits
You may receive a federal income-tax deduction for the full fair-market value of the securities
You avoid long-term capital-gain tax on any appreciation in the value of the stock
