Form and Instructions for Making Gifts of Securities through the UUA (.pdf file)
- By transferring ownership of appreciated securities to the UUCSS (as a gift or part of your pledge), you are able to claim a charitable income tax deduction for its current full market value, but you avoid the incurrence of capital gain tax that you would owe if the stock were sold.
- The UUA will provide you with a letter for your records confirming your gift, including the amount and date of the gift.
- On the UUA gift form you should clearly state the Gift Purpose, e.g., gift to Unitarian Unilateralist Congregation of Saratoga Springs.
Here is an example of how your gift of appreciated stocks and mutual funds would work.
Jeannie Mae Eliot has 50 shares of Quikfix, Inc. stock which she bought ten years ago at $10/share. Today, those 50 shares are worth $20,000.
If Jeannie Mae Eliot sells the stock herself, she must pay capital gains taxes on the $19,500 increase in the stock’s value since she purchased it. She is in the 36% tax bracket, and the capital gain tax rate on this asset would be 20%. After she pays tax on the gain, she will have $16,100 of the original $20,000 remaining to give away or reinvest.
After-Tax Cost of Stock Gift
If Jeannie Mae Eliot donates the stock to the UUCSS and the UUA sells it and directs the proceeds to the UUCSS, she saves both income taxes and capital gain taxes, as follows:
A. Federal Income tax savings on her gift $7,200 ($20,000 x 0.36)
B. Capital gains tax savings on her gift 3,900 ($19,500 x 0.20)
C. Total tax savings $11,100
D. After-tax cost of gift $8,900
E. Net value of gift to UUA $20,000
Source: UUA webpage. For more information please go to http://www.uua.org/giving/funds/giftsstock/index.shtml
