If you're looking for a way to help the animals, while also achieving
specific tax benefits, donating stocks, bonds, and/or mutual funds
might be right for you. Our staff is happy to assist you with any
transaction.
Stocks that have appreciated in value can be
subject to capital gains tax when sold; however,
by transferring your appreciated shares of stock directly to LCAS (rather
than selling them and remitting the proceeds to LCAS), you can avoid all capital
gains and resulting taxes. Plus, the IRS allows you to claim, on your itemized
Federal income taxes, the full fair market value of the shares (calculated as
the average of the high and low prices on the day LCAS receives the shares as a
charitable gift).
To make a gift of securities, or for more information, please contact:
Lonnie Ells, CPA
LCAS Finance Director,
(208)746-3681 phone
(208)746-3682 fax
lonnie.ells@clearwire.net
An Example
Mr. and Mrs. Generosity decide they would like to immediately
make a significant gift to support the Lewis Clark Animal Shelter and receive a
charitable tax deduction as well. Reviewing their portfolio, they note their
shares of Intel Corp. have multiplied many times the original, split-adjusted,
purchase price of $4 per share. After contacting LCAS to arrange the gift and
receive transfer instructions, the G's order their broker to execute a DTC
transfer of 100 shares of Intel from their account to LCAS's account.
Here is the outcome:
|
Original value of stock |
$4
x 100 shares = $400 |
|
Current value of stock* |
$25 x 100 shares = $2,500 |
|
Capital gains tax liability if stock is sold (rather than donated) |
$2,100 ($2,500 current value - $400 original value) |
|
Capital gains tax liability if stock is donated to LCAS |
$0 |
|
Charitable tax deduction allowed with donation |
$2,500 ($25 x 100 shares) |
|
Federal tax savings realized with donation** |
$750 ($2,500 charitable tax deduction x 30¢) |
|
Other possible savings |
Will reduce Mr. and Mrs. G's adjusted gross income subject to your state's
income tax. |
*Based on high-low
average on the day LCAS receives the shares. In this example, on the day the
shares were received, Intel traded at a high of $26 and a low of $24, for an
average price of $25.
**Assuming Mr. and Mrs. G are in the 30
percent tax bracket.
Important Tips
- Please notify LCAS's Development
Office of your intent to make a gift of securities BEFORE any
transfer occurs. This will help us ensure the appropriate steps are taken and
you receive all necessary tax documentation. Additionally, we will provide you
with LCAS's account information, which your broker will need to execute the
transfer.
- To avoid capital gains tax liability, you must TRANSFER the shares
to LCAS, as opposed to selling them. Be
sure your broker clearly understands your intent. The method most commonly
used is called a 'DTC Transfer'.
- To facilitate such transfers, LCAS maintains accounts with many brokerage
houses.
- Under-performing stock can also be a good candidate for charitable giving.
The capital loss incurred on the sale of such stock can be used to offset your
other capital gains. Then, the cash proceeds from the sale can be given as a
charitable donation.
|
Lewis Clark Animal Shelter
