Charitable Donations of Appreciated Stock – A win/win situation!

By Jean M. Stenger, CPA 

Consider donating appreciated stock from your investment portfolio instead of cash.  Your tax benefits from the donation can be increased and Sky Foundation will be just as happy to receive your stock.

The tax benefit to the donor is in the form of a larger deduction for the donation of the stock, using the fair market value of the stock on the date of the donation WITHOUT having to pay taxes on the value of the appreciation (capital gain).    In other words, the donor does not have to recognize the gain on the donated stock as long as the donation is made out of the donor’s brokerage account and received directly into the foundation’s account (not converted to cash first). The stock must be held for more than a year to qualify for this preferential tax treatment and must not be from a retirement account (401K or IRA).  

Sky Foundation receives the fair market value of the stock which can be converted to cash and used to fund its research  programs and achieve its mission.

The information contained in this newsletter article is for general informational purposes.  Consult your tax advisor for tax advice specific to your tax situation.

Jean M. Stenger, CPA is currently a Senior Manager at the CPA firm of Derderian, Kann, Seyferth & Salucci, P.C.