With the end of the calendar year quickly approaching, there is still much uncertainty about the looming tax implications coming our way.
One constant that we do know, however, is that a gift of stock is almost always a wise decision. You can find the following article about stock donations, and even more information about all the different ways to meet your philanthropic goals on our website at: rjfoundation.org.
If you are thinking about establishing a Donor Advised Fund, creating an endowment, or even just donating to Richmond Jewish Foundation, a gift of stock may be more tax-wise than a cash gift.
As stocks grow in value, they may appreciate substantially beyond the original investment. When the stocks are sold, any growth above the original cost is considered a capital gain and is subject to capital gains tax of up to 20 per cent or more (15 per cent federal rate plus a 5 per cent or more state rate).
By giving RJF appreciated securities (that have been held at least a year and a day), you can avoid the capital gains tax and receive an income tax deduction for the fair market value of the stock at the time of the gift.
Mr. Smith owns a stock with a current value of $10,000. He originally paid $2,000 for the stock (his “cost basis”). This means when he sells the stock, he may pay a 20 percent tax on the appreciation ($8,000 in appreciation x 20 per cent tax rate = $1600).
By giving the stock to RJF rather than giving cash, he not only will receive an income tax deduction for the fair market value of the stock on the day of the gift, he also will avoid the $1600 in taxes.
- Stock – $10,000
- Cost Basis – $2,000
- Appreciation – $8,000
- Capital gains tax avoided by making gift – $1,600
- Charitable tax deduction – $10,000
How to Make the Transfer
To transfer shares of publicly traded stock to RJF, call your broker and instruct them to transfer the stock to the Richmond Jewish Foundation account. RJF maintains accounts at several major brokerage firms with standing sell orders.
If we do not have an account with your broker, we can provide them with the information they will need to complete the transaction. To insure proper handling of your gift, please call Gail Howerton at (804) 545-8653 or Joice Burnette at (804) 545-8628 to notify us of a pending stock gift.
This tool is just one of many that help us, at Richmond Jewish Foundation, execute our vision to preserve the Jewish people, Dor L’Dor (generation to generation), for the advancement of Tzedakah (justice) and Tikkun Olam (repair of the world).
If you’d like to discuss your philanthropic desires, please feel free to contact RJF President and CEO Jesse Feld at firstname.lastname@example.org or by calling (804) 545-8656.