Giving Appreciated Securities

Are you or is someone in your congregation considering a gift of appreciated securities? This article explains the advantages and can be used in your church newsletter and on your church's website.

There are definite tax advantages in giving property that has appreciated in value and has been held long-term. Here's how it works:

Tom has 200 shares of ABC Corporation stock that he purchased for $20 a share three years ago; the current value of ABC Corp. stock is $47 a share. If Tom sold the stock, he would have a taxable long-term gain on the transaction that can be calculated in the following manner:

          $47 minus $20= $27 capital gain per share

          200 shares times $27= $5,400 in capital gains

Tom could sell the stock, pay the capital gains tax and donate the remaining proceeds to his Moravian Church or favorite Moravian agency. If, however, Tom donates the stock to his church, he would not incur any capital gain and he could deduct the entire current value of the gift (200 shares x $47= $9,400) as a charitable gift.

An income tax deduction is allowed for the full fair market value of the property given. In addition to receiving a charitable deduction for the full fair market value of such a gift, Tom pays no capital gains tax on the appreciation when the gift is made (although the alternative minimum tax implications must be considered). Such a gift is deductible up to 30 percent of Tom's adjusted gross income; any excess can be carried over for five additional years.

The Moravian Ministries Foundation (MMFA), an interprovincial agency of the Moravian Church, is pleased to assist Moravian churches and agencies with gifts of publicly traded stocks, bonds, and mutual fund shares. We can help you use your gift of appreciated securities to fund a life-income gift for your church/agency like a charitable gift annuity or a unitrust. Pay no upfront capital gains tax on the transfer, and receive lifetime payments from your gift plan that equal or surpass the dividends the securities are paying now. The result? You make a gift to your church/agency while diversifying your portfolio and securing a stream of income.

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