AU Watch

Frequently Asked Questions About Donating Securities

Following are some frequently asked questions and answers that apply to gifts of securities.  While every effort has been made to ensure their accuracy, the answers are of general application and are not intended to be a substitute for legal, tax, or investment advice.

WHAT TYPES OF SECURITIES CAN I DONATE?

We accept publicly-traded stocks, mutual funds, bonds, and publicly-traded stock certificates that you hold personally.

  •      First, consider giving securities from your portfolio that have the greatest appreciation.  That way, you’ll avoid the greatest amount of capital gain.
  •    Second, never sell appreciated stock when you intend to give the proceeds to charity or you may lose many of the tax benefits. Always transfer; never sell appreciated stock before making a gift to a non-profit organization.
  •     Third, consider giving securities such as stocks or mutual funds you have owned for at least one year. Because they will be considered long-term capital property, you can claim an income tax charitable deduction for their full fair market value.
  •      If you donate stocks or mutual funds you have owned less than one year, they will be considered short-term capital gain property. If you sell these securities, your gains are subject to tax at ordinary income tax rates. If you donate them, you will avoid this tax; however, your deduction will be limited to the lesser of their fair market value and the amount you paid for them.
  •      If your stocks or mutual funds have depreciated in value, you may want to consider selling the shares and gift the cash to CBN.  By doing this you can take the loss on your tax return and also deduct the cash gift.

We recommend you consult your tax advisors to determine the best assets to donate.