Stock Donations

How a Gift of Stock Can Be A Win-Win

Do you own stock that’s increased in value since its purchase or have clients who do? If you or your clients have owned the stock for at least one year, there is a unique opportunity for philanthropy.

When someone donates securities to Students Run LA, they receive the same income tax savings (if they itemize) as if they wrote SRLA a check directly, but with the added benefit of eliminating capital gains tax on the transfer.

Making a gift of securities to support SRLA students is as easy as instructing a broker to transfer the shares directly to SRLA. Just have your broker complete and return this form.

How does it work?

A stock purchased more than one year ago for $10,000, which has appreciated to $25,000 today, would potentially trigger $2,250 in capital gains tax if sold ($15,000 X .15 capital gains tax rate assumed). On the other hand, donating the stocks to SRLA would generate a $25,000 income tax charitable deduction, and $0 capital gains tax.

Using assets other than cash also allows for more flexibility when planning a gift. For example, if you or your client aren’t ready to give up these assets during one’s lifetime, a gift of securities through a will or living trust allows for the flexibility for the donor to change their minds at any time and continue to receive dividends and participate in shareholder votes; the securities are still the property of the owner if needed for other expenses.

Take the next step

For more information on donating stock to SRLA, please click here or contact Christine Pajak, SRLA’s Development Director, christine@srla.org or 818-654-3360.

Disclaimer: This summary was prepared as a guideline and is not intended as professional legal or tax advice. Please consult your own tax and legal professionals regarding your particular situation. Please note that your long-term capital gains tax rate may be different than in the example above.