Many times, a stock portfolio is most valuable assets you own, and one that carries substantial capital gain—appreciation in value. The downside to assets that have increased in value over the years is that the federal government is prepared to levy taxes of up to 15 percent on your capital gain from securities. With careful planning, you can reduce or even avoid federal capital gains tax.

As stock prices increase, so do the taxes you owe on the 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 2010. But when you donate publicly traded stocks held long term (owned for more than one year) to a qualified charitable organization such as Pattie A. Clay Foundation, you avoid all capital gains taxes. Plus, you may take the full fair market value of the stock gift as a charitable deduction on your income taxes. The maximum deduction you may take within a given tax year is 30 percent of your adjusted gross income. If you are unable to take the entire deduction in one year, you may carry the excess deduction forward for five additional years.

Even if you own stock you wish to keep in your portfolio, giving us the stock and using cash to buy the same stock through your broker provides the same income tax deduction with a new, higher basis in the newly acquired stock.

If you have stock losses, sell the stock yourself to realize the loss and take the allowable deduction for tax purposes. Then generate a charitable deduction by donating the cash proceeds of the sale to Pattie A. Clay Foundation.