Jane has stock that has increased in value since she
purchased it years ago. She would like to sell the stock
and make donations in memory of her mother to charities
she supported. Jane has three problems:
If she sells the stock, she will pay capital
gains tax on the increase in value of the stock.
If she sells the stock and pays the capital
gains tax, there will be less money to donate to
charity.
By selling the stock, she will have a smaller
deduction on her income taxes than if she could
donate the market value of the stock.
Jane also knows that if she tries to donate the stock
directly to the charities she has chosen, some of the
smaller charities may not have the tools in place to
accept her gift of stock.
Jane's investment advisor gives her some advice. Jane
can establish a fund in memory of her mother at the
First Community Foundation of Pennsylvania with her gift
of appreciated stock. By donating the stock directly to
the Foundation, Jane will:
Receive a tax deduction on the full market value
of the stock at the time of the donation (subject to
IRS regulations)
Avoid the capital gains tax that would otherwise
arise from the sale of the stock.
At the time of her donation, Jane may designate
income from the fund to benefit the causes that were
important to her mother. The fund will continue to
provide grants to charitable organizations in
perpetuity.
The First Community Foundation of Pennsylvania and its
affiliates can accept gifts of
appreciated stock. For
more information, please
contact the
Foundation.
