A recent article by the New York Times linked to below says that many investors are looking for ways to reduce their tax profiles by moving income to current years and selling stocks that have locked in capital gains. Instead of selling those stocks, and investor looking to limit his tax profile might wan to consider donating the same stock to a non profit organization. As a matter of fact, if tax rates for capital gains do go up, then stock donations become even better tax savings vehicles. Instead of selling the stocks and paying capital gains, one can donate the stock and avoid capital gains tax altogether! Of course, you would have had to hold the stock for over a year and other tax restrictions might apply (ask your CPA).
Overall, investing in stocks is a nice way to increase your wealth. Donating those stocks is a nice way to avoid paying heavy capital gains taxes come year end.
Mitt Romney gets a lot of credit for the amount of money he has given away — as he should. No one has to give any money away, so the fact that some people choose to do so is admirable.
In 2010, Mitt Romney took $3 million in charitable deductions on his tax return, against adjusted gross income of $22 million.
- $1.5 million was a direct cash donation to the LDS Church
- $1.5 million was a stock donation to the Romney’s private foundation, which is called the Tyler Foundation. The Tyler Foundation, in turn, gave away $647,500 in 2010, of which $145,000 went to his church.
Stock Donations made to qualified organizations may help reduce the amount of tax you pay.
The IRS has eight essential tips to help ensure your contributions of Stock Donations pays off on your tax return.
1. If your goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you cannot deduct contributions made to specific individuals, political organizations or candidates. See IRS Publication 526, Charitable Contributions, for rules on what constitutes a qualified organization.
2. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. If your total deduction for all noncash contributions for the year is more than $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
3. If you receive a benefit because of your contribution such as merchandise, tickets to a ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.
4. Donations of stock or other non-cash property are usually valued at the fair market value of the property.
5. There are special rules for determining fair market value of stocks.
6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization and the date and amount of the contribution. For text message donations, a telephone bill meets the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution and the amount given. Stock Donator maintains these records for you if you maintain a stock donator account.
7. To claim a deduction for contributions of cash or property equaling $250 or more, you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash, a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more. Stock Donator maintains these records for you if you maintain a stock donator account.
8. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which generally requires an appraisal by a qualified appraiser. This rule does not apply to Stock Donations.
Just announced low 1.9% fee!
Stock Donator’s transaction fee for a successful transaction is now 1.9% which is lower than some credit cards and lower than paypal. Now organizations have an incentive in getting stock donations, your fee is less than accepting cash!
We guarantee you won’t find a lower transaction fee for accepting stock online from any other vendor.
*The 1.9% fee is still subject to the $10 minimum and to all trade fees as stated in our user agreement.
Now is a great time to advertise your organization’s ability to quickly, easily and effectively accept stock donations online!
With the recent economic slow down, donations to charities has also suffered. Many non-profits need to re-think their fundraising efforts. Donors are looking for ways to get the most bang for their buck!
Many organizations are advertising and receiving stock donations as Donors are recognizing the significant tax advantage to donating stock. As the market rebounds, more people will have appreciated stock and will desire the ability to donate those securities.
IS YOUR ORGANIZATION READY TO CATCH THIS NEW WAVE OF DONATIONS?
Sign up for a Stock Donator account today to start receiving stock donations in the easiest way possible.
Stock Donator is focused on providing non-profits and other organizations with an easy and efficient way of accepting stock donations. Donors may open accounts free and receive a cross-branded website which will allow them to accept stock donations from donors within a day.
Donating stock online has never been easier. Sign up your organization today to allow your donors to donate stock online to your organization.
A donor-advised fund is a charitable giving vehicle administered by another entity and created for the purpose of managing charitable donations on behalf of an organization, family, or individual.
A donor-advised fund requires the donor to set aside a certain sum of money that may be invested in stocks, and later, if the stocks appreciate in value, they can donate those stocks without worrying about capital gains taxes.
The good thing about donor advised funds is that, when they increase in value, the donor gets to claim a tax deduction that was larger than their cost basis.
THE BAD THING about donor advised funds, is that when the portfolio is down, the donor will claim a smaller deduction that their cost basis. AND DONOR ADVISED FUNDS CHARGE FEES TO DONORS! You pay for someone else to control your portfolio and you lose control of donating only the winning stocks.
With Stock Donor, you don’t need to donate until you have a gain! Your portfolio remains solely under your control ! Therefore you can always donate and receive a deduction that is larger than your cost basis! Also, donors NEVER have to pay Stock Donator a fee for using our service. 100% of the FMV of the tax donation will belong to the Donors!
Open a Stock Donator account today and start donating stocks to charities the fast, easy and secure way.
Kimberly Lankford, Contributing Editor at Kiplinger’s Personal Finance describes howA When giving a gift, how your investment has fared will make a big difference on your taxes.
She says that the bigger the capital gains, the more advantageous it is to donate stock over cash. A That is in agreement with our Stock Donator Calculator.
She also says that before a donor gives away stock, they should first make sure the charity is set up to deal with the gift. Some small charities don’t have brokerage accounts and may have a tough time selling the stock or mutual funds.
Company Expands Siebert Charitable Stock Donation Program to Include New International Relief Efforts as Investors Show Interest in Donating Stock to Help in Japan Tragedy
On Tuesday, March 22, 2011 — The American Red Cross and Siebert Financial Corp. (NASDAQ: SIEB) announced an expansion to a program aimed at encouraging stock donations to aid the victims of the Japan earthquake and tsunami disaster. The plan eliminated for a short period of time any commission charges on sales of stock donated to the Red Cross, for the victims of the Japan earthquake and tsunami.
As an example of Siebert’s program, if a contribution to the Red Cross involves 200 shares of stock trading at $20 per share, the value of the contribution could be increased by more than $120 by eliminating commissions that would typically be charged by a full-commission broker. To date, Siebert has sold more than $16,500,000 in stock donated to the Red Cross.
Stock Donator commends both the Red Cross and Siebert for their efforts and for identifying the tax benefits to donors of donating stock over donating cash. Stock Donator reminds you that we make donating stock to non profits an easy, secure, and simple online process. Open an account today!
There is a great article on the Motley Fool by Roy Lewis which explains in detail the benefits of stock donations. A That article can be found hereA http://www.fool.com/FoolCharityFund/Donating_Stock.htm
Among other things it gives illustrative examples of how much a donor could save if they donate stock rather than cash.
Stock Donator prides itself on being the easiest way to give stock toA organizations. A Sign up for a free account today.