A stock portfolio is often among the most valuable assets you own—and one that can carry substantial capital gain, or appreciation in value. With careful planning, you can reduce or even eliminate federal capital gains tax while supporting our work. Read on to see why donating stock can offer even more tax benefits than writing a check.
How It WorksAs stock prices increase, so do the taxes you owe on the long-term capital gain, which are generally charged at a rate of 15 percent (0 percent if you are in the 10 and 15 percent tax brackets) through 2012. But when you donate publicly traded stock you've owned for more than one year to a qualified charitable organization such as PETA, you enjoy two major tax benefits:
The income tax deduction for long-term capital gain property is limited to 30 percent of your adjusted gross income in the year you make the gift, but your excess deduction is deductible for up to five additional years.
Learn how to transfer stock to PETA.ExampleLucy wants to make a charitable gift of $10,000. She can make her gift with either cash or stock. She has a marginal federal income tax rate of 28 percent and is not subject to state or local income taxes. The stock's value is $10,000, with a cost basis of $4,000.
Long-term capital gains tax eliminated ($6,000 x 15% rate)
In this example, using the stock instead of writing a check saves an added $900. A higher federal tax bracket and any state or local income taxes would further improve Lucy's results.
Learn More A tax or legal advisor can provide you with additional information. We would be happy to assist you as well. Simply contact Tim Enstice at 757-962-8213 or email@example.com; we can work with you to find a way to give that meets your goals.
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