The "Appreciation" Of Giving, Literally

Giving 2

I know that most people will simply write a check to their charity of choice but for many, there is a more tax efficient way to gift, right?

With the end of 2013 fast approaching, have you considered your year-end charitable gift strategy? While it is sometimes hard to figure out to whom you are going to give to, also remember to consider what you are going to give. In addition to your time and/or your money, there are other special (yet common) assets to donate.

Most seasoned donors are already well acquainted with the fact that there are many great tax advantages to charitable giving. In that spirit, keep in mind that those appreciated securities you have may be the perfect gift to benefit your charities rather than the IRS.

This was the subject of a recent Forbes article titled “Gifting Appreciated Securities: A Win-Win-Win Scenario.

Read the original article for details regarding the accounting, securities-talk and the would-be story of our hero, Mr. Benevolent. In essence, however, “appreciated” assets are those that are worth more now than they were when you bought them. In turn, the increase in value represents a net gain – a capital gain – and that can translate into a capital gains tax upon transfer.

In the charitable giving context, you can perform some tax magic. If you sell an appreciated asset, you must first pay the capital gains tax. Thereafter, you may give the after-tax proceeds to charity. You may only claim the value of this after-tax gift for charitable deduction purposes.

On the other hand, if you give the same appreciated asset to charity, then 100% of the value goes to work for the charity. Why? The charity pays no income taxes! Even better, the tax code allows you to claim the full appreciated value when calculating your charitable contribution.

Smart, savvy giving is worth planning – for you and your charities.

To talk to Terry Bertram, an estate planning attorney about your estate planning needs, visit

Reference: Forbes (November 6, 2013) “Gifting Appreciated Securities: A Win-Win-Win Scenario

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