Gifts of Appreciated Securities
Smart gift planning combines charitable intent with cost-efficient planning techniques. Of critical importance is the kind of asset used to fund the gift. Usually, long-term appreciated property can generate the most favorable tax benefits. Reason: Gifts of such property provide a double benefit—a charitable deduction, in most cases, for the full fair-market value of the property—plus avoidance of any potential capital-gain tax.
The chart below illustrates the additional tax savings from a gift of appreciated assets.
|
|
|
Cash
|
Appreciated Property
|
|
A.
|
Fair-Market Value
|
$10,000
|
$10,000
|
|
B.
|
Cost Basis
|
10,000
|
4,000
|
|
C.
|
Capital Gain
|
0
|
6,000
|
|
D.
|
Capital-Gain Tax (15%)
|
0
|
900
|
|
E.
|
Charitable Deduction
|
10,000
|
10,000
|
|
F.
|
Actual Tax Savings (24%)
|
2,400
|
2,400
|
|
G.
|
Total Tax Savings (D+F)
|
2,400
|
3,300
|
More Information
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