Gifts of Securities (Stocks, Bonds, Mutual Funds)

Invest in Your Community through a Gift of Securities. 

Gifts of appreciated securities (bonds and stock, including stock in closely held companies) may be used to: 1) establish a Fund, or 2) add to an existing Fund. Such gifts often provide important tax advantages. Their full fair market value is deductible as a charitable contribution up to 30 percent of your adjusted gross income. As with gifts of cash, deduction amounts exceeding this limit may be carried forward for up to five additional years. The added benefit of giving appreciated securities is the avoidance of the capital gains tax on the appreciated portion of the gift. Gifts of closely held stock enjoy the same tax benefits as with publicly traded stock.

Tax laws offer a triple tax benefit for gifts of securities (stock, bonds and mutual funds) that have increased in value since purchase or acquisition.

Benefits of Giving Securities

  • Provides the satisfaction of making a gift today that can be invested in your community and/or your favorite charity
  • Creates an immediate personal charitable income tax deduction
  • Avoidance of capital gains taxes
  • Reduction of potential estate taxes

 

Gifts of Stock versus a gift of cash (example):

 

Determining the Value of the Gift
Your tax deduction for a gift of actively traded securities is determined by the average of the highest and lowest quoted sales price on the date of the gift. For a gift of mutual fund shares, your deduction is the public redemption value of the shares on the date of the gift.

The date used to value your gift of securities depends upon the way the securities are delivered.

  • If the security is hand-delivered, the gift is effective on the date of delivery.
  • If the security is mailed, the gift is effective on the postmarked date, assuming the stock power(s) and stock certificate(s) are received in due course.
  • If the securities are held in “street name” (in a brokerage account) the date they are transferred into the PineBelt Foundation account is the date of the gift.
  • For mutual fund shares, the gift is effective when the donor’s shares are transferred into the PineBelt Foundation’s account with the mutual fund company. The mutual fund company provides the necessary paperwork.

 

The Deduction
Charitable deductions for gifts of securities may be up to 30% of your adjusted gross income in the year of the gift. If the total amount of the charitable gifts of appreciated property made in one year exceeds this 30% deduction limit you may carry over that part of your deduction for up to five additional years. For example, if your adjusted gross income for the year is $100,000, up to $30,000 of appreciated property gifts given to the PineBelt Community Foundation or for the benefit of an affiliated fund is deductible this year.  Any amount over $30,000 may be carried forward for up to five additional years.

Please click here for a brochure on Gifts of Securities.

For more information please contact your Professional Advisor or Theresa Erickson, Executive Director at contact@PineBeltFoundation.org or call 601.583.6180