Stocks and bonds

Stocks and bonds allow you to make a gift of publicly-traded securities to Ascension Wisconsin Foundation and potentially save on income and capital gains taxes.

A gift of publicly-traded securities could be right for you if:

You have publicly-traded securities that you have owned for more than a year
Your securities have increased in value since you bought them
Your securities provide you with little or no income

STOCK DONATION PROCESS

More information

What are publicly-traded securities?

Publicly-traded securities are stocks, bonds and other investment vehicles whose values are readily available from an established securities market. For example, stocks listed on the New York or NASDAQ stock exchanges are publicly-traded securities.

Are mutual fund shares publicly-traded securities?

Although mutual funds are sold by individual mutual fund companies rather than on an exchange, the same charitable contribution rules apply to mutual fund shares as to shares of publicly-traded securities. Gifts of mutual funds have the same tax benefits as gifts of individual securities.

Income tax benefit

If you have held your securities for more than one year, and provided you itemize, you may deduct from your taxable income the full fair market value of your shares as of the date of your donation, regardless of what you paid for them. Your deduction is limited to 30% of your adjusted gross income. You may, however, carry forward any unused portion of your deduction for up to five additional years.

Capital gains tax benefit

When you donate publicly-traded securities that have increased in value, and you have owned the securities for more than one year, you do not have to report any of your capital gain in the securities. If you were to sell these securities yourself, you would owe capital gains tax on the difference between the sale price and the amount you paid for them.

Should I give my securities, or sell them and give proceeds?

You should give your securities directly to Ascension Wisconsin Foundation if you have held them for more than one year and they have appreciated in value. This way, you will avoid paying tax on any capital gain you have in your securities. If you sell your securities first and then give us the proceeds, you will have to pay capital gains tax on all of your capital gain, an unnecessary and potentially substantial cost to you.

What is the advantage of giving appreciated stock instead of cash?

When you make a charitable gift of cash, you get an income tax charitable deduction only. When you make a charitable gift of the same value with appreciated stock, you get the same income tax charitable deduction and you avoid capital gains tax on all of your capital gain. The more highly appreciated your security, the more capital gains tax you will avoid.

Should I make a gift of securities that have lost value?

No! If you sell securities that have lost value, you can net that capital loss against capital gains. Even if you cannot take a deduction for loss securities this year, there is a five-year carry forward. If you want to make a gift of loss securities, sell the securities and take the capital loss. You can then donate the proceeds of your sale to Ascension Wisconsin Foundation and use the capital loss to offset future capital gain.

What if I give securities I bought less than a year ago?

The charitable deduction available for property you have owned for 12 months or less, so-called "short-term capital gain" property, is limited to either its current full value or what you paid for it, whichever is less. For example, if you give stock worth $10,000 that you purchased nine months ago for $1,000, your charitable deduction will be $1,000, not $10,000.

When you give short term gain property, your deduction is limited to 60% of your adjusted gross income rather than the usual 30%.