Donating stocks just became more rewarding
From Cadesky Tax Seminars:
Donating public company stock just became more rewarding.
If you make donations, think about donating public company stock.
Why?
Donating public company stock results in no tax on the capital gain.
The after-tax cost of the donation can now be as low as 15%.
The donation tax credit you get is worth about 50% of what you donate. Not having a capital gain to recognize is worth another 35%. Do the math.
Donation Tax Credit (Value) – 50%
Capital Gains Tax (Not Paid) – 35%
Total Tax Benefit: 85%
But alternate minimum tax may come into play, if the donation is large.
Which stock do you donate?
The stock with the highest percentage appreciation.
If you have a very large gain on a stock (say 200% or more), don’t sell all of it. Keep some shares for donations.