Gifts of Stocks, Bonds and Mutual Funds2020-05-28T22:41:16-07:00

Gifts of Stocks, Bonds & Mutual Funds

While charities usually ask donors to give cash, numerous organizations will gladly accept investment securities. This option provides tax benefits that allow you to make larger contributions without spending more.

Nonprofits use these assets in ways that suit their current financial needs. A charity may immediately sell donated securities. On the other hand, they may decide to keep your stock and earn money from dividends or its rising share price.

Benefits of Gifts of Stock, Bonds and Mutual Funds

Many philanthropists overlook the advantages of this planned giving option. When you donate investment holdings, you can subtract their value from your taxable income. Furthermore, you won’t have to pay capital gains tax and neither will the charity. This boosts the size of your donation by up to one-fifth in comparison to selling the equities and giving cash.

Things To Consider

These contributions only yield significant tax benefits when your securities have gained value since you bought them. You also need to have held them for at least 12 months. Additionally, it’s vital to confirm that a specific charity actually wants to receive investment assets. Some small, local nonprofits might hesitate to do so if they lack experience with stocks and bonds.

Who Is It For?

This form of philanthropy works well for any client who holds profitable securities, has a substantial tax burden and seeks to support a charity that accepts investment assets. However, it’s not an ideal solution if your holdings have lost value after you’ve acquired them. In the case your preferred nonprofit does not directly accept donations of securities, a Donor-Advised Fund could simplify the process and let you use tax-free investments to aid any registered charity.

Do you need assistance to plan your giving and work towards the most beneficial outcomes? We know how to contribute money and assets in ways that limit taxation and, at the same time, bring value and positive impact. Our well-informed advisors can also identify investment opportunities as we strive to help turn your dreams into reality while furthering important causes. Please contact us to consult with one of our trusted financial professionals.

Pence Wealth Management and LPL Financial do not provide legal or tax services. Please consult your legal advisor regarding your specific situation.


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