The Benefits of Donating Appreciated Securities

Donating appreciated securities (that you have held for a minimum of 365 days) to the Center for Whale Research means that your assets can have the maximum impact in helping to protect the Southern Resident killer whales. By giving appreciated securities to the Center for Whale Research, you benefit from a tax break, and you can deduct the value of the gift as a charitable donation. But that is not all—the tax benefits are two-fold—you also benefit from avoiding capital gains tax on the transfer. Thus, by making a donation of appreciated security as opposed to a cash donation, your gift can have more impact.

Here’s How it Works:

Let’s assume that you plan to make a $10,000 cash donation to the Center for Whale Research. The donation would cost you $6,300 (value of the donation minus the tax saving—assuming a 37% income tax bracket). Now let’s compare that to a donation of $10,000 of an appreciated security that you purchased for $5,000. By donating an appreciated security, you would save an extra $1,000 because you would not be subject to capital gains tax (assuming the higher rate of 20%). There are clear advantages to donating appreciated stocks, but these advantages scale with the appreciated value of the security. For example, for an extra cost of $1,650, compared to the net cost of a $10,000 cash donation, you could gift 50% more ($15,000) to the Center for Whale Research in appreciated assets.  

Note. For the securities gift to be fully tax-deductible, they must have been held by you for at least one year.