Donating Appreciated Stock

or your Required Minimum Distribution (RMD)

Giving appreciated stock owned for over one year can provide significant tax benefits as can transferring your RMD from an IRA.  Here are 5 things to consider:

  1. Giving appreciated stock that has been held for more than a year is better than giving cash.  If you donate stock that has increased in value since being purchased over a year ago - and if you itemize deductions - you can take a charitable deduction for the stock's fair market value on the day you donate it.  You will also avoid the capital gains tax on the increase in value over time which you would have to pay if you sold the stock and then donated the cash proceeds.  NOTE:  You can only deduct the fair market value if you have held the stock for over a year. 

  2. If you are holding a losing stock, it is better to sell it and give the cash.  You can then deduct the charitable donation (if you itemize) and you can also take a capital loss.

  3. If you are 70 1/2 or older you can transfer up to $100,000 to charity tax-free each year - even if that is more than your RMD.   The money counts as your required minimum distribution but isn't included in your adjusted gross income.  You must be at least 70 1/2 to make a tax-free transfer and tax-free transfers can only come from an IRA - NOT a 401K.  Note:  You may not claim a charitable contribution deduction for the amounts contributed as a tax-free transfer.

  4. You do NOT need to itemize your deductions to get a tax benefit from the RMD transfer.

  5. Good Shepherd Lutheran is already set-up to receive stock donations.  Here is the applicable information you will need to provide your broker to complete a transaction:

    GSLC Brokerage Firm: 

    TD Ameritrade

    200 S. 108th Ave

    Omaha, NE  68154

    DTC Number:  0188

    Account Number:  423-418885

    Phone: 1-888-723-8504

Please let Vicki Schmidt, our Business Manager, know of your transfer by emailing vicki@goserve.net.  Include the name of the security, the number of shares, the date you submitted the paperwork to your broker and the fund you would like to receive your donation (example:  Capital Campaign Fund).

Note that most brokerage firms need a lead time of at least 14 business days to complete a transfer.

Everyone's financial situation is different.   Please check with your financial or tax advisor before taking any action.