Legacy Planned Giving

Gifts of Appreciated Securities

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. 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 (28%)

   2,800

   2,800

G.

Total Tax Savings (D+F)

   2,800

   3,700

 

*For certain high-income taxpayers (singles above $200,000 and marrieds above $250,000) additional savings may be realized by the avoidance of the 3.8% health care surtax on investment income.

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