Giving | Financial Securities
Giving shares of stock to Gospelink provides one of the most tax-advantageous ways to assist its ministry efforts!
For many people with investments, it is a better stewardship of God's resources to transfer stock shares directly to Gospelink rather than to sell them and donate the proceeds. By giving stock shares that you have owned for more than one year, you will receive an income tax deduction for the full fair-market value, and you will completely avoid capital gains tax. If your stock has increased in value since you purchased it, this method gives Gospelink the largest possible contribution amount while also maximizing your charitable deduction. This manner of giving can also significantly decrease your tax liability.
What are the benefits?
*You completely avoid paying capital gains tax by giving stock directly to Gospelink.
*For the same after-tax cost of giving by a check or credit card, you may be able to give substantially more to Gospelink with a gift of stock and stretch your donation dollars to go further.
Mark has been a regular supporter of Gospelink. When he heard about the benefits of giving appreciated stock instead of cash, he decided to try it to help the Gospelink preachers purchase Bibles for new believers in Tanzania. Years ago, Mark purchased shares of his company stock for $4,000. Now those shares have a market value of $10,000.
If he were to sell the stock outright and then give the proceeds, Mark would incur $6,000 in capital gains ($10,000 market value minus $4,000 cost basis). After he pays taxes of $1,200 (at a 15% federal and 5% state capital gains tax rate on the $6,000 gain), his gift to Gospelink and his charitable deduction would be $8,800.
By giving the stock directly to Gospelink, Mark can claim a charitable deduction of the full market value of the gift ($10,000). Gospelink can then sell the shares of stock and apply the full amount ($10,000) to obtain Bibles for new believers in Tanzania. And because a donation to Gospelink is not a sale, Mark will not owe any capital gains tax on the transaction.
Mark’s tax deduction for this charitable gift of stock shares worth $10,000 would be around $3,300 (at a 28% federal tax rate and 5% state tax rate). When he subtracted that tax deduction from his original cost of $4,000 for the stock, he realized that it actually cost him only $700 to provide a gift worth $10,000 to help purchase Bibles! The process is as simple as coordinating his stock donation with the Gospelink investment broker.
Please contact Gospelink at 434-485-7007 to see how you could make this type of donation. Give more while saving more!
What about mutual funds? Mutual funds are simply a collection of stocks or other investments that are pooled together and professionally managed. For tax purposes, shares of mutual funds are generally handled in the same manner as individual stocks.
What type of receipt will I get? After we receive your gift of stock shares or mutual fund shares, Gospelink will send you a Gift-in-Kind receipt. This receipt will list the name of the stock or mutual fund shares which you donated, the number of shares, and the date they were given. According to IRS regulations, we are not able to state the value of the shares on the receipt. You can obtain the value of the shares at the time they were given directly from your investment firm. This would be the amount you could claim as a charitable deduction when you file your income tax return.
Need more information? Please give us a call at 434-485-7007 from 8:00 AM to 5:00 PM EST or email us with your questions. We would be glad to help.
DISCLAIMER: This information is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It is always a good idea to seek legal and tax advice from your professional advisor(s).