DONATE STOCK - A new way to donate stock

Donate stock in a company that has a market value worth a minimum of 2k a year.

The IRS (and state tax agencies) allows this type of appreciated asset to be donated to a charity, also at its current market value and allows an ordinary income tax deduction. One of the fringe benefits of this type of donation is that the donor does not have to pay the capital gains tax on the difference between the price he paid for the asset and the current value of the asset – yet one receives the deduction based on the current value.

For example, let’s say you purchased 10,000 shares of “XYZ” stock ten years ago for $2.00 per share, or $20,000. Today, th at stock is worth $8.00 per share, or $80,000, and you donate it to a charity. You are able to get the full $80,000 deduction against ordinary income and you never paid the capital gain on the increased value of the stock. Your deduction may be worth about 35% federal and 10% California. That means you save about 80,000 times 45% equaling $36,000 in taxes, and once again, do not ever pay the approximate 25% state and federal capital gains tax of $20,000.