I hope that you and your family have had a joyous Feast of the Resurrection this year, and that the Holy 50 days are a source of endless blessings for you.
If you are anything like me, you spend a lot of time in April looking at your tax returns and planning how to best plan for the upcoming year. To help you plan, I want to tell you about some of the benefits of donating stocks.
In a nutshell, it can be much more financially beneficial for you to donate stocks that you have owned for more than 1 year than to sell the stocks and donate cash because you will not have to pay capital gains tax. The capital gains tax is only paid the on profits of the sale of an investment.
This can save you a lot of money.
Here is an example of the benefits of donating stocks versus donating cash:
Imagine you own shares of stock that you bought for $7,000 five years ago, and today, the shares are worth $15,000. You figure this is the perfect opportunity to donate these gains to a charitable foundation. If you decided to sell the stock rather than donate it, you would end up paying capital gains tax on the $8,000 profit. If you’re in the highest tax bracket, the federal tax on the gains would be $8,000 x 23.8% = $1,904. Depending on the state you live in, there may be additional state taxes. Thus, selling the stock and donating the cash would end up costing you $1,904 in additional taxes.
However, if you donate the shares valued at $15,000 you avoid the capital gains tax because you would have no gains to declare (thus, you can give the $15,000 without paying the $1,904).
By donating stocks in this way, you can give your gifts to the children and lower the amount you have to pay in taxes this year at the same time.
May God bless you, and may He reward you abundantly for your prayers and love for His children in Egypt.
One Body in Christ,
Founder and Executive Director