Charitable Giving of Appreciated Assets

Charitable giving in any form can provide you with a nice tax benefit. Giving appreciated assets can provide you with a fantastic tax benefit compared to other forms of giving. Here are the basics of giving appreciated assets and how it works.

Appreciated Assets

Any charity is gladly going to accept cash and this is what most people are used to giving. An alternative to giving cash is to give appreciated assets instead. For example, you can give stock or mutual fund shares that you have owned for an extended period of time.

Tax Benefits

When you decide to give appreciated assets, you will get two tax benefits. Typically, when you sell stock or mutual fund shares, you will have to pay capital gains tax on the profit that you made. However, when you give these assets to a charitable organization, you will be able to avoid this tax. No capital gains taxes will be necessary when you use this method of donation.

In addition to this, you will also be able to deduct the amount of your donation from your taxable income. For example, if you give $20,000 for the year, you will be able to reduce your taxable income by $20,000. You can deduct up to 50 percent of your annual income if you give that much.

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