Gifting Stock to Charity

Whether it makes more sense to gift shares of stock to charity or simply sell the stock and donate the cash depends on whether the stock has increased or decreased in value since it had been purchased.  If its value has increased over time, it is better to donate the stock.  If you have owned the stock for more than a year, you may take the current value as a charitable deduction if you itemize and you do not have to pay tax on the appreciation.  On the other hand, if the investment has lost value, it is better to sell the stock and give the proceeds to charity.  Your deduction is still based on the current value of the stock; however, you get to use the loss to offset other gains.  If there is an excess loss, you may deduct $3,000 against other kinds of income. 

If you plan to gift stock to charity, act quickly.  “You need to let the organization know the name of the stock, the number of shares that are being transferred and the date you’re expecting them to arrive.  If the shares go straight from the broker by electronic transfer, the donor’s information doesn’t come through, and we can have a mystery on our hands trying to figure out where [the stocks] came from.”  Also inform the charity who the stock is from so you can get a receipt for the gift to keep in your tax files.

See Kimberly Lankford, How to Donate Stock to a Charity, Kiplinger, Dec. 26, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.