The gift of appreciated securities - stocks, bonds or mutual funds that have grown in value - can be an easy way of making your charitable dollars go farther. By taking advantage of the applicable tax incentives, donors can significantly increase the amount of funds available to them for charitable giving.
How do I make a gift of stock?
Stock held in your brokerage account can be electronically transferred to either FCNL (not tax-deductible) or the FCNL Education Fund (tax-deductible).
For stock transfer instructions or to make a mutual fund transfer, email stephen@fcnl.org to request printed instructions. Please note in your email if you hold the actual stock certificates or will make the transfer in mutual funds.
After we receive verification of the electronic transfer or receive the certificates, we will send you an acknowledgement letter stating the date and value at the time of transfer and whether the gift was to FCNL or the FCNL Education Fund. You will want to keep this letter for income tax purposes.
Do I have to pay taxes on the stock if I donate it?
You do not have to pay capital gains tax on stock that is transferred directly either to the Friends Committee on National Legislation or the FCNL Education Fund — that is, instead of selling the stock and giving the cash. Since the securities are donated rather than sold, capital gains taxes from selling the securities no longer apply. The more appreciation the securities have, the greater the tax savings will be.
There are restrictions on the a charitable tax deduction you may take. If your gift of securities is eligible for a charitable tax deduction, there are limitations on the total deduction you may take in one year, with the remainder carried forward to future years.
You may take a charitable tax deduction for the full fair market value of the securities if:
- You purchased them over a year ago
- Their current value is greater than their original cost
- You transfer them directly to the FCNL Education Fund (a 501(c)(3) charitable organization) instead of selling the stock and giving the cash
You may take a deduction of the original cost basis for the stock if:
- You purchased the stock less than a year ago
- All other criteria above are met
You may not take a charitable tax deduction on the value of the stock itself if:
- You transfer the stock to Friends Committee on National Legislation (a 501(c)(4) civic organization). Donations to FCNL are not tax-deductible. However, you still avoid capital gains tax liability and provide essential support to our lobbying efforts.
Questions?
Contact Stephen Donahoe (stephen@fcnl.org or (202) 465-7560) for details.
As always, we urge you to consult your attorney or financial advisor regarding your specific legal or tax situation. The material presented on this Planned Giving website is not offered as legal or tax advice. Read full disclaimer.
