Another way to maximize the value of your gift.
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 federal capital gains tax of up to 15 percent (some states have a capital gains tax as well). By giving Camp Tecumseh 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 stock with a current value of $100,000. He originally paid $20,000 for the stock (his “cost basis” for the stock). This means when he sells the stock, he may pay a 15 percent federal capital gains tax on the appreciation ($80,000 in appreciation x 15% capital gains tax = $12,000). By giving the stock to Camp Tecumseh YMCA 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 $12,000 in federal capital gains taxes.
|Stock||$100,000 current value|
|Capital gains tax avoided by making gift (assuming 15% capital gains tax)||$12,000|
|Current charitable tax deduction||$100,000|
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*The information contained herein is for explanatory purposes only and is not intended to be used as tax advice. Camp Tecumseh YMCA recommends that you contact a professional tax advisor who can provide you with additional information on how your participation in the above program may affect your personal tax situation.