Charitable contributions of long-term appreciated securities—i.e. stocks, bonds and/or mutual funds that have realized significant appreciation over time—have become increasingly popular in recent years because of two key advantages:
- Any long-term appreciated securities with unrealized gains (meaning they were purchased over a year ago, and have a current value greater than their original cost) may be donated to a public charity and a tax deduction taken for the full fair market value of the securities—totaling up to 30% of the donor's adjusted gross income.
- Since the securities are donated rather than sold, capital gains taxes from selling the securities no longer apply. The more appreciation the securities have, the greater the tax savings will be.
Example of benefits of a $1,000 gift of stock with a cost basis of $500:
|Give Cash||Give Appreciated Stock|
|Proceeds to Charity||$1,000||$1,000|
|Federal Income Tax Savings*||$396||$396|
|Capital Gains Tax Saved||$0||$119|
|Total Tax Savings||$396||$515|
*This table assumes the donor itemizes deductions, and is in highest 2017 tax bracket. Further savings on state income taxes are also possible. Your own situation will of course vary from this example. Consult your tax advisor.
If you have any questions, please contact the Advancement Office at 231.276.7623, or email@example.com. For instructions on how to make a stock gift to Interlochen, please complete our securities donation form.