Broker Check
Gifting of Appreciated Stocks for Fall

Gifting of Appreciated Stocks for Fall

| August 14, 2020
Share |

The last couple of years have been good for certain stocks, especially technology names. If you are fortunate enough to own some shares that have appreciated significantly AND are charitably inclined, a technique called gifting of appreciated shares could be a win win.

 

Let’s assume you purchased a stock for $5,000 and fortunately it has doubled to $10,000. For simplicity, let’s also say that is the amount you would like to donate to your preferred charity. We would transfer the shares to the charity and you would get a deduction for the full market value so in this case $10,000. The charity sells the shares and uses for their purposes and due to being tax exempt, pays no tax.  The $5,000 gain and the tax due gets washed away. You could then replenish the brokerage account with the $10,000 to purchase new shares.

 

Combining this approach with tax loss harvesting the losers in your portfolio can lead to tax savings.

Share |