Stock Talk … and Yes, It’s Easy!

Posted on November 15, 2019 by University of Saint Mary in Fall 2019, View From The Spire // 0 Comments

Donating appreciated stock is one of the most sensible ways to give.

Appreciated stock is simply stock increased in value from the date of purchase – e.g., you bought 10 shares in 2015 valued at $25 per share. Today, those 10 shares are valued at $50 per share. You made money! Congrats! And, you also own that appreciated stock.

You are eligible to take a charitable deduction equal to the market value on the date of transfer. Let’s go back to those 10 shares valued at $50 per share – that’s a $500 value, and every bit counts as a charitable deduction when you transfer to the University of Saint Mary.

How to determine if transferring stock works for you:

You’ve owned the stock for at least one year.
Your stock has grown in value.
You want to maximize your charitable deduction without paying capital gains tax.

OK … I’m Interested!

Tricks and tips from Director of Major Gifts and Planned Giving Jane Ellen Liebert, C’97:

Plan ahead. It can take up to two weeks for the transfer and sometimes longer if you wait until December. If you want to give by Dec. 31, get the ball rolling.
Contact me. I will provide the info you need, and we can discuss how you want your gift designated.
Contact your bank/broker/transfer agent. Explain how you want to transfer stock to Saint Mary. You might need a letter of instruction, and I have a sample.
Once transferred, you will receive a letter from Saint Mary with the fair market value of your previously owned stock. Keep this letter for your taxes.

Wham! Bam! Done!

Tip 1: Don’t sell your stock and then donate the proceeds to Saint Mary. Sure, you’ll receive a charitable deduction, but you’ll pay capital gains, eliminating a strategic tax benefit.

Tip 2: Don’t transfer stock that has declined in value. If you bought stock for $20,000 and it’s now $10,000, your deduction is reduced to $10,000. And, you won’t be able to claim a capital loss by making the transfer to Saint Mary either. Instead, you could sell the declining stock, claim a capital loss, and then make a donation to Saint Mary with the proceeds.