|©2008-2018 St. Nicholas Uganda Children's Fund
|Tax Benefits of Donating Investments
|Investments That Have Increased in Value
|By donating appreciated stock or other securities to the St. Nicholas Uganda Children's Fund, you
receive the full deduction for a charitable contribution, and you don't have to pay capital gains tax
on the increase in value. For example, if you bought stock ten years ago for $1,000 and it is now
worth $5,000, you can donate the shares and can claim the entire $5,000 as a tax deduction.
You will not owe capital gains tax on the $4,000 increase.
|Gifts of stock and other securities have become a popular way to give to charity and enable the
donor to receive substantial tax savings. When you donate investments, you can deduct the full
value of the asset on your taxes and the charity gets the full benefit as well. The recipient does
not have to pay taxes on the gains if it decides to sell. When you donate appreciated securities
(stocks, bonds, mutual funds, ETFs) that you've owned for more than a year, you can reap
significant tax advantages.
|Investments That Have Decreased in Value
|Donating shares to charity can be a smart move when you have stocks that have been gaining,
but it's better not to donate losing shares to charity. The capital gains tax benefit does not apply
because there is no capital gain. In this case, it's better to sell the shares and donate the proceeds
from the sale. You can use the loss to offset gains from the sale of appreciated shares, and
receive a charitable tax deduction for the cash donation of the proceeds. If you donate the stock
instead of selling it, you can claim only the fair market value as a charitable deduction and will not
receive the benefit of a capital loss deduction.