Although most people think of giving cash when they think of making a gift to Special Olympics, many donors discover they generate even better benefits if they give long-term appreciated stock. more
Which is better -- donate stock to Special Olympics or donate the proceeds from selling the stock?
According to Kiplinger's Personal Finance Magazine, it depends on whether you've gained or lost money on the investment.
If the stock has increased in value since you bought it, then you'll be better off donating it to Special Olympics instead of selling it. That way, you'll avoid the capital-gains taxes on the profit. Say you bought 100 shares of a stock at $10 and it's now worth $40 per share. If you give the stock to charity, you won't have to pay the capital-gains taxes on the $3,000 in profit. If you held the stock for more than a year and are in the 15% long-term capital gains tax bracket, that move will save you $450 in taxes, which you'd owe if you sold the stock first. And if you've owned the stock for more than a year, you'll still be able to deduct its current market value -- $4,000 -- as a charitable contribution on your taxes if you itemize, like you would whether you gave stock or cash. (If you held the stock for one year or less, then you'd only be able to deduct the original $1,000 purchase price.)
If the stock has decreased in value, though, it's better to cash it in first so you can deduct the loss. If that 100 shares of stock you bought at $10 is now worth $4, for example, you'll be able to write off the $600 loss if you sell the stock before giving the money away. If you held the stock for more than a year and are in the 15% long-term capital-gains bracket, for example, that move can save you $90. And you'll still be able to deduct the value of the gift as a charitable contribution -- $400 in this case.
Special Olympics Michigan has a brokerage account set up so we have the ability to accept stock gifts. Please contact Roger Yob at firstname.lastname@example.org or 1-800-644-6404 or for the details you need to tell your broker to donate your stock to Special Olympics.
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