gifts of appreciated securities
Current tax laws make it possible for you to make your gift of securities to the Boys & Girls Clubs of Greater Scottsdale Foundation at a low after-tax cost. A lifetime gift of appreciated securities generally qualifies not only for the income tax deduction associated with all lifetime charitable gifts, but also avoids the long-term capital gains tax on your paper profit. In short, there is no tax on your gain even though your “profit” can be counted as part of your gift to the BGCGS Foundation!
The timing of your gift of appreciated securities is often crucial. The value of the stocks, for purposes of your income tax deduction, will be set by the value of the securities on the day the gift is actually made. In the case of actively traded securities, the value is the mean (average) between the highest and lowest quoted sales price on the day of the gift.
It is easy to make a gift of securities to the Boys & Girls Clubs of Greater Scottsdale Foundation. If the certificates are held in a brokerage account simply ask your broker to contact the BGCGS Foundation for instructions. If you have the stock certificates in your possession, send the UNENDORSED STOCK CERTIFICATE BY REGISTERED MAIL TO: Boys & Girls Clubs of Greater Scottsdale Foundation, 10515 E. Lakeview Drive, Scottsdale, AZ 85258. Enclose a cover letter outlining the purpose of your gift along with a description of the issues and the number of shares. Send separately a signed “stock power” form for each certificate with the name of the issue filled in and signed by your broker or an officer of a national bank. Or, alternatively, you can hand deliver the certificates to a trustee or other officer of the BGCGS Foundation.
Other rules apply for closely held stock. Contact your broker or financial planner for guidelines on the donation of closely held securities.
In summary here are a few rules for giving appreciated securities:
- The full fair market value of the property, if you have owned it more than one year, is deductible in the year of the gift provided the gift and other similar gifts do not exceed 30% of your adjusted gross income.
- If the gift, coupled with other gifts, exceeds the 30% adjusted gross income test, the excess can be carried over and deducted in up to five subsequent years.
- No matter how much the property has appreciated you pay no capital gains on your paper profits.