A gift of stock may be a “win – win” proposition for both you and The Navigators. By donating appreciated securities that you have held for at least a year and a day, you are able to deduct the full fair market value of the stock on the date of transfer and avoid paying capital gains tax on the amount of appreciation.
Let’s look at a simple example to see how it works:
Let’s say that you shrewdly purchased Walmart stock 10 years ago for $5000. Today let’s say that that same stock is worth $50,000. You wish to donate the proceeds of the sale of this stock to The Navigators, but are not sure whether to sell it first and donate the proceeds, or give the stock directly to The Navigators and let us sell it. Here is a simplified example of how it might work:
Sell the Stock and Give the Proceeds to The NavigatorsGive the Stock directly to The Navigators
|Value of Walmart stock when transferred||$50,000||$50,000|
|Original purchase price||$5,000||$5,000|
|Amount of appreciation||$45,000||$45,000|
|Value of contribution||$50,000||$50,000|
|Capital gains tax (15% of $45,000)||$6,750||$0|
|Proceeds to The Navigators (value of contribution minus tax)||$43,250||$50,000|
|Your tax savings (45% state and federal tax)||$19,462||$22,500|
So if you give the stock directly to The Navigators and let us sell the stock and you itemize on your taxes, you would be able to take the $50,000 as a charitable income tax deduction even though the original cost of the Walmart stock was only $5,000. PLUS you can avoid paying the $6,750 in capital gains tax. PLUS you can avoid paying a sales commission to your broker.
Of course, this is a very simplified example, and as always, The Navigators highly recommends that you consult a qualified tax or financial advisor concerning the details of any transaction that you might make.
Please download the PDF file: How to give Stock or Mutual Funds to The Navigators.
Giving Mutual Funds to The Navigators
If you are giving a gift of shares of a Mutual Fund, please contact The Navigators Non-Cash Gift Coordinator to discuss how to proceed with the transfer. Unlike stocks, each mutual fund company may have its own unique procedures. We may need to contact your broker or mutual fund company to determine the most efficient way to complete the transfer. For this reason, donations of mutual fund shares may be delayed for some time while The Navigators set up or re-open accounts with the various mutual fund companies.
Please note that The Navigators will seek to liquidate non-cash gifts as quickly as possible in order to convert non-cash gifts into cash that will be used for ministry purposes. It is not our intent or desire to hold onto stocks or mutual funds in order to try to “play the market” or increase gains. We take the stewardship of your gifts very seriously, and strive to make timely and thoughtful decisions regarding these gifts.
For more information please contact the non-cash gift coordinator:
Attn: Non-Cash Gift Coordinator
PO Box 6000
Colorado Springs CO 80934-6000