Giving stocks, bonds, mutual funds, and other securities can enhance your
investment and tax situation while furthering the mission of the church. It is
also possible to give securities and retain the income they generate for your
living expenses.
Sale of securities that have increased in value since they were purchased
results in capital gains taxes. However, by making a charitable gift of
securities, you earn an income tax deduction for the value of the gift at the
time it is given, and the gift is not subject to capital gains taxes. This can
be an especially attractive way to give to the church if you have an
investment that has increased in value but has an uncertain future.
For example: If someone bought 100 shares of stock in a corporation in 1990
for $2,000, the shares may now be worth $10,000 and pay less than 1 percent in
dividends each year. Selling the stock would result in an $8,000 gain-meaning
the sellers would pay as much as $1,600 capital gains tax, plus state taxes in
some areas. If the stockholder gave the shares of stock to the church,
resulting tax savings would be over 40 percent more than if the stock were
sold and the gift were made in cash.
|
Assuming 28% Federal Income Tax, 15% Federal Capital
Gains Tax, and 6% State Tax |
Example 1
Give $10,000 in Securities |
Example 2
Sell $10,000 in Securities |
|
Gift Value |
$10,000 |
$0 |
|
Ordinary Income Tax Savings |
$3,400 |
$0 |
|
Capital Gains Tax Liability |
$0 |
$2,100 |
Giving Securities and Receiving Income
Lifetime Income
There are many ways for donors to give securities while retaining a fixed or
variable income for a number of years or throughout their life. For example,
this can be done through Charitable Gift Annuities and Charitable Remainder
Trusts. With these plans, securities can be sold and reinvested to experience
greater earnings without capital gains taxes. This allows you to set aside
funds for the mission of the church now and increase your income at the same
time.
Gifts can be made for the benefit of the World Church and/or subsidiary
jurisdictions. Contact Estate and Financial Planning at
efp@CofChrist.org
or 1-800-884-7526 (1-877-526-7526 in Canada) for instructions on transferring securities to the
church.
