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.
This information is provided as educational material and not intended as legal or financial advice. Because each situation is different, individuals are advised to obtain legal and tax counsel that suits their needs. The examples contained herein are accurate as of the date of publication and are based on the most recent tax legislation.