Make a Gift of Securities
You may have heard the recent Federal budget included proposed changes to the Alternative Minimum Tax (AMT). Because the changes affect what is subject to AMT and how it will be calculated, there could be significant impacts on individuals and trusts, particularly when related to their charitable giving.
Making a gift of appreciated securities is a great way to support healthcare in our community. Your investment today will not only help St. Joe’s continue to provide the best possible care to you and those you love, it can also offer significant tax savings.
When you donate stocks, bonds, shares of mutual funds, futures and options to St. Joseph’s Healthcare Foundation, you will not pay tax on the capital gain. If you sell your securities, tax must be paid on 50 per cent of any capital gain. The combined benefit of not paying tax on the capital gain and the charitable tax receipt you receive provides excellent tax benefits.
You can transfer shares electronically, in certificate form in the donor’s name, or you can re-register shares in the Foundation’s name. In all cases, your charitable tax receipt will reflect the value of the securities on the date we receive them.
The advantage of donating these assets in-kind is that you will not have to pay tax on any of the capital gains. You can use that donation receipt to offset taxes payable on other sources of income or investments.
Your gift of securities will support innovative research, vital equipment and facility enhancements, and help to recruit and keep the brightest medical minds in our community. All of this helps St. Joe’s continue to provide the best care possible to you and those you love. If you have any questions, do not hesitate to reach out.
Assume that you own appreciated stocks and mutual funds and plan to donate $25,000 of this stock directly to the Foundation rather than giving cash. You purchased these shares for $5,000, resulting in a capital gain of $20,000. You will receive a tax receipt for the fair market value of the stock on the day we receive the funds (in this case, $25,000) and will not pay tax on these gains. We will then sell the stock and use the cash as you’ve directed.
|Selling Shares & Donating Cash||Donating Shares|
|Fair Market Value of Shares||$25,000||$25,000|
|Cost of Shares||$5,000||$5,000|
|Capital Gains Realized||$20,000||$20,000|
|Taxable Capital Gain||$10,000 (50% capital gain inclusion)||$0|
|Taxes Payable (assumes 46% tax rate)||$4,600||$0|
Disclaimer: The information above is for illustration purposes only and does not constitute legal, financial or tax planning advice. We recommend that you consult with your own professional advisor in planning your donation.