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It's important to educate potential donors about the benefits of giving appreciated stock to your organization.

Let's say that a contributor is interested in donating $10,000. In return, of course, the person will receive a charitable deduction based on his or her tax bracket. But what if the contributor sold $10,000 worth of stock - purchased one or more years ago for $2,000? After the sale, the supporter wrote a check for $10,000 to your organization.

The result for your not-for-profit is the same, but it is very different for the individual who sold stock to make a contribution. The donor is going to have to report a capital gain of $8,000 and generally pay a federal capital gains tax of 15 percent ($1,200), as well as state tax. By giving stock, the donor would be exempt from paying capital gains tax.

By informing your supporters about the advantages of this tax-saving strategy, you can encourage more contributions. If you have other questions about the tax ramifications of donations, please contact Tax Specialist Crystal Martin at 717-757-6999 or 800-745-8233 or email her by using the form below.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness.