An Idea for Giving "Appreciated" Stock

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  • Dec 3, 2009

A tax account friend recently provided this idea for charitable giving, especially helpful as we approach year-end.

Giving of "appreciated" stock is usually a good deal.  Let's say you bought some stock of Company X for $10 and now it is worth $100. If you sold the stock and then gave the money away, you would have to include the $90 taxable gain in your income before taking the $100 charitable deduction.  However, if you give the stock directly to the charity, then you get the $100 deduction - without having to include the $90 taxable gain in your income.  This is usually a very good deal.  What some folks do, so they don't deplete their investments, is to give the $100 of stock to charity and then invest the $100 of cash they would have given the charity in more stock.  This strategy can also help you rebalance your investment portfolio (by buying stocks of a different company from the stuff you gave away).

You can contact a tax advisor to see if this is a good idea for you.