Giving
donating appreciated stock
Donating appreciated stock means giving shares you hold for more than a year directly to a charity, instead of selling first. The charity gets the shares, and you do not sell them to give.
Donating appreciated stock means you give shares that have gone up in value straight to a charity or a donor-advised fund. You do not sell them first. The IRS calls property "capital gain property" if you would have had a long-term capital gain by selling it at fair market value on the date of the gift. Capital assets held more than one year generally fit.
For example: you own shares worth $20,000 that you bought for $8,000. If you sell, the $12,000 gain is taxable. If you give the shares directly to a ministry or a donor-advised fund instead, you do not sell them, so you do not trigger that sale. The gift is worth $20,000 to the receiver.
Why it matters: cash and appreciated shares look the same to the charity, but they can differ for your tax return. Holding period matters. Gains on assets held one year or less are short-term and taxed as ordinary income. The IRS also sets deduction limits as a share of your income for this kind of gift. Not every charity accepts stock, so check first. A donor-advised fund can take it.
Related terms
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