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Stock Gifts

Very "Appreciated" Stock Donations

by WCC Stewardship Committee

After hearing of a recent substantial stock contribution to Winnetka Covenant Church, I learned there can be real tax benefits to the tax-savvy charitable giver. My two main discoveries are:

  • WCC can accept stock donations.
  • Contributions of long-term, appreciated stock (owned more than a year) may provide greater benefits to both the donor and the church than donating cash.
  • By donating appreciated stocks with a capital gain, both the donor and the recipient will benefit more by donating the stock, instead of selling it and donating the cash. A donor’s tax benefits from the donation can be maximized.

    If the stock has increased in value since it was acquired, then a donor may be better off from a tax standpoint by donating the stock to WCC instead of selling it. In this way, a donor may legally avoid the capital-gain tax on the profit.

    This tax planning and donation tool is derived from the general rule that the deduction for a donation of property to charity is equal to the fair market value of the donated property. Where the donated property has appreciated, the donor usually does not have to recognize the gain on the donated property. These rules allow for the "doubling” tax benefits: a charitable deduction, plus avoiding tax on the appreciation in value of the donated property.

    While WCC “appreciates” any donation, if a stock decreased in value, though, it is usually better to sell the depreciated stock so a donor can deduct the capital loss.

    It is legal and moral for donors to arrange affairs to comply with the law and keep taxes as low as possible while providing WCC with a larger contribution to support our missions.

    In considering the contribution of appreciated stock, a donor should ensure that the shares have been held for more than one year and qualify for the "qualified appreciated stock" deduction. Check the contribution first with a tax professional for information on any contribution limitations.

    WCC is set up to handle a stock gift and can accept and then sell stock or mutual funds. If you wish to inquire about donating stock, please email John Couleur or call (847) 501-3640. John can then make arrangements to coordinate the transfer of donated stock from most brokerage accounts. If practical, giving appreciated stock to WCC could provide a donor with significant tax savings. While the spirit of giving is key, a donation of appreciated stock can further benefit both the church and the donor, who can take advantage of both tax savings of the donation and avoiding tax on capital gains.

    Questions? Please Email John Couleur

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