Donate, Ways to Give:  Gift of Appreciated Securities

Gifts of appreciated stock allow donors to support the work of the MDRT Foundation while providing the opportunity to avoid capital gains tax on the gift.

If you want to upgrade your current donation to the MDRT Foundation but feel unable give a larger cash gift, consider making a gift of appreciated stock. You benefit by taking a current tax deduction on the fair market value (FMV) of the stock on the day you give it rather than having to pay capital gains on the sale.

Here is how it works.

A MDRT Foundation Knight, who normally gives cash gifts to the MDRTF, wants to make a significant gift. The Knight holds 1,000 shares of XYZ Corporation common stock that has appreciated from the original purchase price of $10 per share. Today, the shares are worth $100 per share.

Assume the Knight then gifted $82,000 to the Foundation in cash. The Knight would qualify for an $82,000 income-tax deduction. (The net gift was $82,000 and net cost was $70,480, a 116 percent charitable efficiency ratio.)

A BETTER WAY?
What if the Knight gifted the entire amount of XYZ Corporation stock (1,000 shares x $100 per share = $100,000) directly to the Foundation instead? It would result in a $100,000 charitable deduction and eliminate the capital gains tax liability. (Appreciation on publicly traded securities is not taxed when given as a charitable gift.) The Knight's net tax savings are $36,000.

In this instance, the charitable efficiency ratio is 156 percent ($100,000 gift/$64,000 net cost); gifts of any size would offer benefits in proportion.

Giving securities can be a wise strategy.

For more information or to make a gift life insurance or securities, please contact the MDRT Foundation at (847) 692-6378.