Gifts of Publicly Traded Stock

Donating stock to Susan G. Komen Northwest NC is a wonderful opportunity for you to make a gift that will have immediate benefits at the local level, while at the same time providing tax benefits to you.  As long as you have owned the stock for more than a year, you can:

  • Take a charitable deduction on your taxes in the amount of the stock’s current fair market value (up to 30% of your adjusted gross income, but you can carry the excess contributions forward on your taxes for up to five subsequent years);
  • avoid capital gains taxes on the profit you would have made on the stock if you had sold it instead of giving it to charity; and
  • reduce estate taxes and settlement costs after your death.

Gifts of Closely-Held Stock

In some situations, a person may wish to make a gift of stock in a closely-held, family corporation.  If you donate your own corporation’s stock (usually closely-held), you can get the same benefits that you have above, as well as avoid declaration and double-taxation of dividends.

There are several ways you can donate stock from your own business:

  • Make a gift of stock prior to selling the company to receive a personal tax deduction and avoid capital gains taxes;
  • Give the stock to a charitable remainder trust to receive lifetime income; or
  • Give the stock to the corporation and then later repurchase the stock:  A donor who has stock that has increased significantly in value and who has cash reserves might be in the best position to make a gift of this kind.  For example, say you own the majority of the stock in a family business or corporation.  You decide to help Susan G. Komen Northwest NC with a gift of some of this stock.  You transfer shares of your stock to Susan G. Komen Northwest NC.  As a result of this gift, you become entitled to an immediate charitable deduction on your personal income tax returns.  Plus, you avoid the capital gains tax on the appreciation of the corporation’s stock.   Susan G. Komen Northwest NC then sells the stock for the same value at which it was given for cash from the corporation.  The gift of stock leaves you in full control of the corporation and without any personal costs, and the cash can be invested and used by Susan G. Komen Northwest NC.  There are a few legal quirks with this type of gift, so be sure to consult with an attorney before implementing this type of gift plan.