Gifts of appreciated stock are a great way to give to Alto and receive significant tax benefits. You can:
- eliminate capital gains taxes,
- increase the amount you are able to give to Alto, and
- increase your itemized deduction for charitable contributions.
What does this mean? Let’s assume you have stock you could sell for $5,000 that you purchased for $3,000 at least one year ago. If you sell this stock directly, you will pay capital gains tax on the difference of $2,000. If your income tax rate is 30%, your capital gains tax rate would be 20%. Below is a table that demonstrates how the net costs compare when you donate cash or appreciated stock.
The above information is not intended to be tax or legal advice and might not apply to your unique situation. Please discuss possible tax deductions with your tax professional.