Gifts of securities offer a tax deduction of full fair market value of their appreciated assets — if owned more than one year — and they avoid all capital gains taxes on their “paper profit.”
Take the example of a St. Bonaventure alumna. The stock she purchased in 1985 for $200 is now worth $1,000. If she gives the stock instead of cash for her Bonaventure Fund gift, with fair market value of $1,000, she can claim a $1,000 charitable deduction on her next income tax return. In a 33 percent bracket, that’s a tax savings of $330. Furthermore, she avoids $120 in capital gains taxes that would be due whenever the stock is sold. The result: After figuring the tax savings, a gift of $1,000 costs only $550.
Your tax deduction for a gift of appreciated securities is fixed by the value of the securities on the day your gift is made. For actively traded securities, value is the mean (average) between the highest and lowest quoted sales price on the date of the gift. So timing can be very important. Your gift is effective on the day St. Bonaventure receives the stock.
If you wish to contribute securities, you or your broker should contact our office for the most current electronic delivery (DTC) instructions.
In general, it is not advisable to give securities that are presently worth less than you paid for them. If the sale of stocks or bonds would result in a deductible loss, it is usually to your advantage to sell them to establish a tax loss and then donate the proceeds.
It is usually inadvisable to make a charitable gift of appreciated securities when your capital gain is short-term (i.e., you have owned the securities twelve months or less). Such a gift is deductible only in the amount of its cost basis, not its market value. The university’s receipt states market value no matter how long the shares have been held.
Always discuss donations with your tax consultant to maximize your benefits.
Please Note: In order for you to receive proper credit before the end of the year, please instruct your broker to complete your transfer before Friday, December 16, 2022. The date of record for the stock gift is when the university receives the stock, not when the stock is transferred by a financial manager or broker.
For more information, please contact:
Mandi Wilton Davis, '03
Director of Advancement Services
St. Bonaventure University
Murphy Hall 201A
St. Bonaventure, NY 14778
Phone: (716) 375-2328
Send an email