Donating appreciated stock can provide significantly greater tax benefits than donating cash.
Tax Advantages
Maximize Your
Tax Benefits
Avoid Capital Gains
Full Market Value
Up to 37%
Potential tax savings on appreciated stock
Why Donate Stock Instead of Cash?
When you donate appreciated stock held for more than one year, you receive two powerful tax benefits.
Avoid Capital Gains Tax
When you donate stock directly to charity, you avoid paying capital gains tax on the appreciation. This can save you up to 20% federal tax plus 3.8% net investment income tax, plus state taxes.
- No federal capital gains tax (up to 20%)
- Avoid net investment income tax (3.8%)
- No state capital gains tax
Deduct Full Market Value
You can claim a charitable deduction for the full fair market value of the stock on the date of the gift, not just what you originally paid for it.
- Deduct current market value
- Not limited to your cost basis
- Up to 30% of AGI for stock gifts
Real Examples
Stock vs. Cash Donation
See the difference between donating stock versus selling and donating cash
Sell Stock, Then Donate Cash
Stock value$10,000
Capital gains tax (20%)- $2,000
Net investment income tax (3.8%)- $380
Cash available to donate$7,620
Tax deduction (37% bracket)+ $2,819
Best Option
Donate Stock Directly
Stock value$10,000
Capital gains tax$0
Net investment income tax$0
Value of stock donated$10,000
Tax deduction (37% bracket)+ $3,700
By donating stock instead of cash:
$2,380 More to Charity
$1,499 Less Cost to You
This example assumes stock with $10,000 cost basis that appreciated to $10,000, held for more than one year, and donor in 37% tax bracket.
Requirements for Maximum Tax Benefits
To receive the full tax benefits, your stock donation must meet these criteria:
LONG-TERM HOLD
Stock must be held for more than one year to qualify for long-term capital gains treatment.
QUALIFIED CHARITY
The receiving organization must be a 501(c)(3) tax-exempt nonprofit organization.
APPRECIATED VALUE
Greatest benefit when stock has appreciated significantly since purchase.
IMPORTANT NOTE
This information is for educational purposes only and should not be considered tax advice. Please consult with your tax advisor or CPA to understand how stock donations apply to your specific tax situation.
Ready to Maximize Your Tax Benefits?
Start donating stock today and take advantage of superior tax benefits
