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Tax-Smart Donating - Use Appreciated Securities

Future soaring pilots being mentored

We greatly appreciate the support of our donors through both major gifts and the annual Eagle Fund Drive!

Donating Appreciated Securities Enables Larger Donations and Less Taxes than Donating Cash

If you have securities that have appreciated in value, giving them directly to the SSA (rather than selling them first and donating the cash) allows you to receive a tax deduction for your gift without incurring capital gains taxes.

Generally, this method benefits donors who already itemize deductions. However, the exact savings to you depends on multiple things, and you should discuss your specific situation with your tax advisor first.

Below is a general illustration of how this giving method can work.

Your've have generously decided to donate $10,000 to the SSA. You own shares of stock that you bought for $5,000 over a year ago, and today, the shares are worth $10,000. You decide to use this to fund your donation. If you sell the stock and donate the cash, you would end up paying capital gains tax on the $5,000 gain.  If you’re in the highest capital gains tax bracket (20%), the federal tax on the gains would be $5,000*23.8%=$1,190. Depending on what State you live in, there may be additional state taxes. Thus selling the stock and donating the $10,000 in cash would end up costing you at least $11,190.

However, if you donate the shares, you do not have to recognize the gain (thus, you can give the $10,000 without paying the $1,190). The SSA is able to sell the shares at their current market value without having to pay the capital gains tax and thus gets the full $10,000.

Note that in both the cash donation and the stock donation case you get to use the donated amount as an itemized deduction up to the applicable IRS limits (which are different for the cash and stock cases - consult your tax adivisor).

Though it may be tempting to simply write a check to the SSA, the slight extra work of giving appreciated securities can be a much more effective donation method in terms of tax savings for you!

If you wish to donate appreciated securities to the SSA, please contact us for assistance with the required paperwork.

Contact us at mylegacy@ssa.org or (575) 392-1177 8 am - 5 pm M-F Mountain Time
The SSA (EIN 95-1932120) is a 501(c)(3) Public Charity. Contributions are tax-deductible to the extent allowed by law.

Posted: 7/17/2018