Giving that Makes Good Sense
By donating appreciated securities to The Foundation, you may increase the impact of your gift and your charitable deduction at the same time.
If you have held securities for more than one year, and they have increased in value during the time you have owned them, consider donating them to a charity such as the United Methodist Foundation of West Virginia, Inc. The IRS allows you to deduct the market value of the securities as of the date you made the gift. If the securities have risen in value since you purchased them, it makes sense to give them to the Foundation. Our policy is to convert gifts of securities to cash and distribute the cash according to the donor’s directions.
For example, if you purchased 10 shares of ABC Company in 2000 at $10 per share, your basis in the stock is $100. Assume that in 2017 the shares are selling for $50 per share. If you were to sell the shares, you may have to pay a capital gains tax on $400, the gain you earned during the time you held the stock. ($500 sales price – $100 basis). If you chose to donate the stock to The Foundation, you would avoid the capital gains, and your contribution amount for tax purposes is $500. Conversely, if the shares lost value during the time you owned them, you may want to sell the securities and donate the proceeds from the sale.
We have several donors who make year-end gifts of appreciated securities every year through our convenient discount brokerage account. One donor couple routinely makes their final year-end gift to their local United Methodist church by giving securities to The Foundation. They provide us clear instructions to distribute the cash from the sale to their church. Another couple makes regular gifts of stock. They have a scholarship fund, a donor advised fund, and a fund that pays a monthly benefit to a local United Methodist church; they will typically make a generous gift of securities, with instructions as to how to divide the cash proceeds among their various accounts.
These donors recognize the benefits of not only the increased impact of giving appreciated securities, but also the ease of record keeping. They can make one gift to The Foundation and direct it to be divided among various churches and charities, but they only have one receipt to keep track of in order to substantiate the gift for tax purposes.
Contact the Foundation for information about how to make a gift of securities.