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Charitable Giving: A Win-Win for Everyone Involved

Financial Planning | Institutional Asset Management | Blog Home

 Brian King By: Brian King

Donating appreciated securities to charity makes much more sense than first selling the security, paying the taxes and then donating the remaining proceeds to the charity. As the donor, you save money on taxes and receive the full benefit of the tax deduction—and the charity receives the full value of the appreciated asset.

This approach to charitable donations has several tax advantages (as long as you have owned the security for at least one year). These include:

  1. The amount of the deduction you receive is equal to the full value of the security at the time of the donation, not your cost.
  2. You are never taxed on the appreciation in the security.
  3. The charity can sell the appreciated security and pay no tax on your gain.

How to Donate Appreciated Securities

A simple way to donate appreciated securities to the charity of your choice is to set up a donor advised fund (e.g. Charles Schwab, Fidelity), and deposit the securities you would like to donate into the account (set up as the John & Mary Doe Charitable Fund, for instance).

Once this has been done, the you receive the deduction for the total value of the securities deposited in that year, even if you decide to spread donations out over a period of years. Donations are made online on your behalf and to the charity of your choice.

Please Note: It’s always a good idea to check with your tax advisor if you’re contemplating making any sizable charitable donations.

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Brian King joined the Plancorp team from PricewaterhouseCoopers, LLP in 2008. Now our Chief Planning Officer, he brings his advanced income tax and estate planning experience to Plancorp’s family office practice, where he helps families understand, grow and preserve their wealth. More »

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