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Donating Appreciated Stock

Giving Appreciated Stock Makes Sense
Even though you give Tzedakah because you want to help others, JFS can help you benefit when you donate Appreciated Stock.

People often acquire stocks or mutual funds when they are young, and hold them for many years. Over time, those securities grow in value. As people grow older and want to give a portion of their estate to charity, they discover that by contributing the appreciated stock, they do not lose much in terms of current income. In fact, when appreciated stock is contributed to Jewish Family Services or another public charity, the donor is able to take a current income tax charitable deduction equal to the fair market value of the stock. If the donor sold the stock, he or she would be required to pay a tax on capital gain.

For example, a family owns stock valued at $10,000; the purchase cost 20 years ago was $2,000. The stock is currently paying $100/year in dividends. The family is in the 36% tax bracket.

If the family contributes the stock to JFS, they avoid the 20% tax on the $8,000 gain (the difference between the $10,000 value and the $2,000 cost), thus escaping a $1,600 capital tax liability. In addition, they may deduct from current income taxes the full $10,000 value of the stock, saving 36% or $3,600.

In essence, thefamily is able to contribute an asset for which they only paid $2,000 and in turn, realize a $3,600 tax savings. The family is able to give the appreciation that has grown throughout the years to JFS, and assure that care continues for those in our community who are most vulnerable.

For information on donating appreciated stock, contact The JFS Office