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Donating gifts of stock

Thank you for your interest in donating stock to our church.  Stock gifts are donations of shares of stock that you own in a public company, private company, or mutual fund.   

Why is donating stock to charity better than cash?

There are several great reasons to donate stock — for starters, it’s one of the most tax-savvy ways to give. Not to mention, today’s online platforms make it an incredibly easy and secure process.

You can donate these types of securities to St. Peter & St. Paul:

  • Publicly-traded stocks

  • Privately-held stocks (which will require independent appraisals beforehand)

  • Shares of mutual funds and ETFs

  • Bonds

 

No matter which type of appreciated stock you donate, your gift goes further than if you sold it and donated the proceeds as cash.

This is because donating appreciated stock lets you save on your taxes in two ways: you avoid capital gains tax on the appreciated value, and you can also claim a tax deduction on the value of the shares you donated. 

Learn more about gifts of stock tax benefits here

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How to donate stock to St. Peter and st. paul

To donate stock to us, please download and fill out our INFORMATION FORM HERE.

1. Decide which shares of stock you want to donate.

First, you’ll need to decide which shares you want to donate, and to which organization. You’ll need the name of the stock, its ticker symbol (if publicly traded), the number of shares to be donated, and the intended transfer date.

 

2. Obtain and fill out the St. Peter & St. Paul Information Form.

Click here to download our Information Form: This will have the information you need for your broker

  • Fill the form out and return to our Finance Department.

  • Our form will have the information you need for to fill out your brokers form

  • Go to step 3

 

3. Fill out the appropriate stock donation forms and send them to your brokerage.

Your own stock brokerage firm will be responsible for transferring your shares to the charity. You can usually find stock donation forms in your online account portal on your brokerage’s website.

If electronic forms aren’t available, you should fill out printed forms in black ink pen, adding all the information from Steps One and Two. Mail or fax your transfer request to your brokerage’s address, which should be listed on your forms. If you receive a confirmation number, keep it for your records.

To be eligible to receive a tax deduction for the current tax year, you need to complete your stock donation by December 31. Keep in mind that a stock donation is recorded on the day it’s received by the charity, not the day you submit the transfer request. The end-of-year period is especially busy for stock brokerages and charities, so it’s a good idea to plan ahead.

 

4. Follow up with the St. Peter & St. Paul to make sure the donation is received.

Be sure to notify us of your stock gift so we know to expect it. One pitfall of this process is that brokerages often report donations of stock anonymously, meaning we might not know who sent us the gift.

Later, follow up with us to make sure we receive your stock donation. Once the transaction goes through, will send you a tax receipt that lists the date of transfer, the value of the donation, the number of shares, and the stock’s ticker name.

Check this receipt to make sure your donated stock was liquidated for an accurate fair market value, and keep it for your records for when you next file taxes.

 

5. Report the stock donation when you file your taxes.

When you file your federal taxes, you must report your stock donation on IRS Form 8283, which is the form for non-cash charitable contributions. You’ll file this form with your tax return for the year you donated the stock.

Understanding the tax benefits of stock donations

Let’s take a closer look at how the tax benefits of stock donations work.

A capital gains tax is the tax you have to pay on the profit generated when you sell a share of appreciated stock. Depending on your income bracket, you could be taxed up to 20% on your capital gains (for assets you’ve held for more than a year). However, if you donate this stock to a charity instead of selling it, neither you nor the charity have to pay taxes on it.

For example, let’s say you purchased a share of stock for $100, and it rose in value to $300 over two years. You’ve generated a capital gain of $200. When you sell that share, you’d have to pay a capital gains tax of up to $40, reducing the final value that you receive from the sale. But by directly donating the stock, the money you would have paid in taxes can instead go to the nonprofit, maximizing your philanthropic impact.

And like most charitable donations, stock donations are deductible from your income taxes. When you file your federal taxes, you can deduct the donation from your taxable income if you itemize your deductions. Some states give income tax deductions for stock, as well.

Giving stock to nonprofits also exempts you from the wash-sale rule, which prohibits investors from selling and then immediately repurchasing stock from a company. When you donate stock, you can immediately repurchase the same stock at its fair market value, which will reset your shares at a higher cost basis and maintain the composition of your portfolio.

Donating stock is a win-win, both for you and for the causes that matter to you.

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Let us know if you have any questions about giving the gift of stock

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