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STOCKS & SECURITIES

Donating stocks or mutual fund shares is one of the smartest ways to support the One Heart, One Soul Campaign while realizing significant tax savings. When you give a gift of shares to a registered charity, there are no capital gains taxes applied to the fully realized amount of the gift. In this way, the Church receives the full value of the securities, you receive a tax receipt for the full value of the gift, and you pay no capital gains tax on any increase in the price of those donated securities.

A donation of securities or mutual fund shares is the most efficient way to give charitably. With a donation of securities or mutual funds, capital gains tax does not apply, allowing you to give more and avoid paying capital gains taxes.

 

Let’s say you purchased common shares in ABC Company for a cost of $1,000 and a few years later they now have a current market value of $5,000. You would have a capital gain of $4,000.

The chart below illustrates what happens if you sell the shares and then donate the after-tax proceeds and what happens if you donate the shares directly to the One Heart, One Soul Campaign.

1. This assumes a 46% marginal tax rate. For calculating capital gains tax, this rate is applied to 50% of the capital gain.

2. $4,080.00 represents the full value of $5,000.00 minus estimated tax of $920.00.