How to give more and pay less. What are the tax benefits of appreciated assets?

As the end of the year approaches, many people begin considering how to make the most impactful contributions to the causes they care about. Beyond the traditional cash gift, some charitable giving options offer greater tax advantages, allowing you to make a meaningful difference while maximizing your financial benefits. Here’s a look at why appreciated assets can be a smart choice for charitable donations and how they can amplify the impact of your generosity.

Appreciated securities – stocks, bonds, mutual fund shares – are excellent options to consider when making charitable gifts, offering tax advantages that may not exist when donating cash. To illustrate the impact, please consider the following for a donor in the 24% federal income tax bracket:

Cash Gift

$10,000 – Charitable donation (cash gift)

$2,400 – Federal income tax deduction

$7,600 – After-tax ‘cost’ of gift

Gift of Appreciated Stock

The tax benefit above can be increased by donating appreciated securities instead of cash. Consider a gift of stock with a $10,000 current market value, purchased years ago for $2,000:

$10,000 – Charitable donation (appreciated stock, cost basis of $2,000)

$2,400 – Federal income tax deduction (24% marginal income tax bracket)

$1,200 – Capital Gains tax not paid (15% long-term Capital Gains tax rate, applies if stock is sold)

$6,400 – After-tax ‘cost’ of gift

In this example, a donor avoids paying capital gains tax on the stock’s appreciated value, but still enjoys a charitable deduction for its full fair market value.

To learn more about donating appreciated assets, please contact Joshua Pruyn, Director of Development, at jpruyn@saviohouse.org or (303) 526-83310