Give Appreciated Stock
For many people, it is better stewardship of God's resources to transfer stock shares directly to Gospel for Asia rather than to sell them and donate the proceeds. By giving securities that have grown in value and you have owned for more than one year, you will receive an income tax deduction for the current fair-market value, and completely avoid capital gains tax. This allows you to increase your donation, impact and charitable deduction!
Scott has been a regular supporter of Gospel for Asia radio broadcasts. When he heard about the benefits of giving appreciated stock instead of cash, he decided to try it. Years ago, Scott purchased shares of his company stock for $5,000 (“cost basis”). Now those shares have a market value of $10,000.
If he were to sell the stock and then give the proceeds, Scott would incur $5,000 in capital gains ($10,000 market value minus $5,000 cost basis). After he pays taxes of $1,050 (the 15 percent federal and 6 percent state capital gains tax rate* on the $5,000 gain), his gift to GFA and charitable deduction would be $8,950 (market value minus taxes). *The capital gain tax rate would be much higher if Scott was in the highest tax bracket.
By donating the stock to Gospel for Asia, Scott can claim a charitable deduction of the full market value of the gift ($10,000). GFA can then sell the stock and apply the full proceeds ($10,000) towards Gospel radio broadcasts according to Scott’s preference. And, since a gift to GFA is not a sale, Scott will not owe any capital gains tax on the transaction.
Scott's accountant figured the tax deduction for Scott’s charitable gift of stock shares was $4,100. When he subtracted that from his original cost for the stock, Scott realized that it actually cost him only $900 to provide a gift worth $10,000 to the Lord's work! The process was as easy as giving his broker the transfer information, and saving the monthly statement from his investment firm to verify his charitable gift.
|ILLUSTRATION||Sell Stock & Give Proceeds to GFA||Give Stock Directly to GFA|
|Original cost of stock||$5,000||$5,000|
|Plus appreciation (gain)||$5,000||$5,000|
|Minus capital gains tax||$1,050||0|
|Equals amount of gift to GFA||$8,950||$10,000|
|Tax savings from charitable deduction*||$3,670||$4,100|
|Less capital gains tax||$1,050||0|
|Actual tax saved||$2,620||$4,100|
|"Cost" of giving gift
(original cost less tax saved)
*Assumes 35% federal and 6% state tax
You may use this Stock Donation Calculator for your specific case.
The preferred way to give shares of stock or mutual funds to GFA is to transfer the shares to our Wells Fargo Advisors account.
- If you have the stock/mutual fund certificate in hand, you should:
- Endorse the back of the certificate appointing Wells Fargo Advisors as attorney to transfer the certificate. Leave BLANK the line regarding to whom the certificate is being transferred.
- Sign the back of the certificate exactly as the name(s) appear on the front.
- Write a letter indicating that you wish to donate ___ (number of shares) of _________ (name of stock/mutual fund) to Gospel for Asia's Wells Fargo Advisors account #3764-8370.
- VERY IMPORTANT: We sometimes receive notification that gifts of stock or mutual funds have come into our account, but are unable to determine who donated them, or how he or she would like the proceeds to be used within our ministry. To avoid this problem, on the day of the transfer, please contact Gospel for Asia to let us know:
Gospel for Asia, Inc.
Account number: 3764-8370
After we receive the gift of stock or mutual funds, Gospel for Asia will immediately liquidate the shares and send you a Gift-in-Kind receipt. This receipt lists the name of the stock or mutual fund, the number of shares, the date they were received into our account, and that no goods or services were received by you in exchange for the gift. IRS regulations do not allow us to state the value of the shares on the receipt. Since the value of stocks and mutual funds fluctuate so quickly, the fair market value of your stock shares is the average price of the stock on the day it was received into our account multiplied by the number of shares donated. For a mutual fund, the fair market price is the day’s closing price multiplied by the number of shares.
If your mutual fund shares cannot be transferred to Wells Fargo Advisors, Gospel for Asia has accounts with several mutual fund investment agencies. If we don't have an account with the agency that handles your mutual fund, we will open one. Then a transfer can easily be made from your account to our account, and we will redeem the shares for use according to your preferences.
Sell Depreciated Stock
Instead of donating stock that is worth less than you paid for it, you should sell it first and then give the proceeds. This provides double benefits:
Dorothy is a generous friend of GFA and makes a gift to the ministry of $20,000 every year to support her missionaries, children and provide a church building. Typically she makes her gift with cash or appreciated stock.
The value of several of Dorothy’s stocks has fallen below what she paid for them. In fact, her shares of “A Corp” are worth half of the $40,000 she paid for them four years ago.
Dorothy directs her broker to sell the stock and she gives the proceeds to GFA. She can use the $20,000 loss she realized on the sale to offset gain from other investments—or even to offset up to $3,000 of ordinary income if her loss is greater than her gain. She receives a charitable tax deduction her $20,000 gift to GFA, a savings of $6,600 in her 33 percent federal tax bracket.
For more information:
If you have any questions or wish to start the process for your gift, please fill out our contact form, or call Gospel for Asia's Harvest Foundation at 800-946-2742.
All gifts are subject to GFA's Gift Acceptance Policy.
DISCLAIMER:This web page is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It is always a good idea to seek legal and tax advice from your professional advisor(s).