Gifts of securities
Stocks that have been held one year or longer and have increased in value make great charitable gifts. They may even be a more convenient way to give than cash. With a gift of securities, you can:
- Make a larger gift
- Receive a larger tax deduction
- Avoid paying long-term capital gains tax on stocks that have appreciated in value
You can deduct the full market value of the securities (limited to 30% of adjusted gross income) and not be taxed on their increased value.
Even if you wish to keep the stock in your portfolio, you can reap big benefits by donating it. Using cash to buy the same stock through your broker will give you the same income tax deduction, but with a new, higher basis in the stock.