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Appreciated securities may provide greater benefits to you
and Milton Academy
Making your gift to Milton in the form of appreciated securities
allows you to reduce the cost of your gift both in terms of
your cash outlay, and through tax savings. Here's how it works:
The comparison is based on the idea that when it comes to making
charitable gifts, individuals with securities portfolios will
either gift appreciated securities outright, or make their gifts
in cash. Donors making cash gifts will either sell securities
now to fund their gifts, or sell those securities at a later
date, to generate cash for living expenses or other investment.
Whether you sell your stock now to fund a gift, or sell it later
for another purpose, you will incur a capital-gains tax liability.
You can avoid this liability altogether by gifting appreciated
securities outright! Making your gift in appreciated stock will
thus not only earn you a tax deduction for the amount of your
gift, but will further earn you back the tax dollars you would
have to pay the IRS on the sale of your securities.
Giving gifts of appreciated securities generates three major
benefits for the donor:
1) A tax deduction, in most cases on the full value of the stock
given, for the amount of the gift; 2) Avoidance of the capital
gains tax that will be payable upon the sale of those securities
at a later date;
3) A low cash cost of making a donation based on the smaller
amount of cash spent on the securities at the time of their
purchase.
In short, making a gift of appreciated securities allows you
to increase your gifting power, while delivering a substantial
tax deduction. The simple, easy-to-use Stock Gift Calculator
on this site will illustrate your actual cost savings based
on the information your input. Try it out and see how much you
can save by making your gift to Milton in the form of appreciated
securities!
Important Facts for Appreciated-Stock Donors:
The Stock Gift Calculator is for illustration purposes only;
please consult your tax advisor for professional advice. Milton
values gifts of securities for tax purposes as of the date the
securities are received into Milton's securities account. Calculations
assume that the stock has been held for more that one year and
therefore qualifies for the federal long-term capital gains
tax rate. Gifts of stock that are held for more than one year
may be deducted at the full market value. State income taxes
have not been taken into consideration; but if you live in a
state that allows deductions for charitable gifts, the net cost
of a gift will be even lower than shown in the illustration
above.
Round all dollar figures to the nearest dollar; do not use commas
or decimal points. All calculations assume that you have held
any stock being considered for at least a year.
Limitations:
- To be eligible for deductability, no single charitable contribution
may exceed 50% of the taxpayer's Total Contribution Base (generally
equal to the taxpayer's Form 1040 Adjusted Gross Income).
- To the extent that this charitable gift exceeds the limitation
described in #1, the deduction may be carried forward for up
to 5 years to be claimed against subsequent years' (qualifying)
income.
- Itemized deductions are generally subject to an offset totalling
3% of the taxpayer's Adjusted Gross Income.
Notes:
(1) Tax bracket is taxpayer-dependent; individual donors should
consult with their tax professional or the IRS to determine
their own rate.
(2) This rate is the top marginal Federal tax rate. Please note
that state tax laws and regulations will treat deduction items
of this kind differently; a tax professional should always be
consulted.
(3) Some taxpayers may be subject to the Alternative Minimum
Tax, in which case the Long-Term Capital Gains rate may be as
high as 28%.
(4) Calculation is based on the principle that either stock
is liquidated today to fund donor's gift, or that if a gift
is made in cash, the donor will be required to liquidate stock
at a later date to gen- erate funds for consumption or subsequent
investment, thus realizing a taxable capital gain.
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