Stocks and mutual funds have become popular investments for many people. The staggering returns of the late nineties may be over, but on average, stocks have historically posted returns of about 10% annually. Consequently, many investors see dramatic appreciation in the value of their securities. Such stocks often make excellent charitable gift choices.
Because federal tax laws offer special incentives for gifts of appreciated stock, many donors find this to be an ideal way to support Pattie A. Clay Foundation. Donors can deduct the full fair market value of a gift of stock, up to 30% of adjusted gross income. Giving appreciated securities is more tax-wise than giving cash because you receive a tax deduction on the appreciated value without paying capital gains tax on that appreciation. For maximum tax benefit of your charitable donation of stock, you must have owned the shares for over one year.
Gifts of closely-held stock also benefit the hospital while increasing your spendable income. Your company can realize tax benefits if the corporation has accumulated substantial earnings over the years. The gift not only saves current income taxes but also reduces the likelihood of an accumulated earnings tax being assessed against your company.
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Remember, there are always details to consider which pertain to your particular situation. Therefore, it is wise to consult your accountant or attorney for additional information and restrictions on the tax consequences of any charitable contribution.