A donation of stock can result in a tax deduction on the fair market value of the investment and do so without incurring taxes on the capital gain or net investment income. Stock gifts can be done by electronic transfer, with Lifestyle Christianity giving proper credit for your contribution.
When you give “appreciated stock,” you may deduct the entire current value of stock you give to the ministry–not just the amount you originally paid for it. Instead, you may deduct the stock market’s value of your stock as it is today. This donation of stock is being given to a qualified non-profit, so you can expect to pay nothing in capital gains tax (for assets held for more than a year).
This gift reduces your appreciated stock portfolio and your gross income, which often equates to a reduction in taxes. Therefore, gifts of appreciation stock support Lifestyle Christianity but also provide tax advantages to you.
What are the Tax Advantages?
FEDERAL TAX ADVANTAGES
By making a gift of long-term appreciated securities to Lifestyle Christianity, you can avoid the capital gains tax that would be incurred if you sold the securities. A gift of securities also entitles itemizers to take an income tax charitable deduction equal to the fair market value of the securities at the time of the gift. In order to avoid the capital gains tax, it is necessary to transfer appreciated securities directly to Lifestyle Christianity rather than to sell them and contribute the net proceeds.
Lifestyle Christianity will value your publicly traded securities for credit to the purpose for which they are given. The valuation of publicly traded securities will be the mean market value as of the day that the securities pass from your control. When short-term appreciated securities (appreciated securities held less than one year) are given, your income tax charitable deduction is usually your original cost. If your short-term securities have depreciated, your deduction is limited to the fair market value of the securities.
If quotations are not readily available, such as for the closely held stock, a qualified appraisal will be required when the value claimed exceeds $10,000.
IRS rules require you to report on Form 8283 all gifts of securities with a value over $500 in order to obtain the charitable income tax deduction.