Marketable Securities: Common & Preferred Stock, Corporate Bonds, Government Securities, Mutual Funds
Income Tax Deduction
The current value of appreciated securities held long-term (more than one year) is deductible, if transferred to a 50% charity, up to 30% of AGI with a five-year carryover for excess deductions. The ceiling is 20% of AGI for 30% charities, with a five-year carryover. Securities with short-term gain are deductible at cost basis up to 50% of AGI (30% for private foundations).
Capital Gains Considerations
No gain is reportable when donors give appreciated securities, which is advantageous even for taxpayers who do not "itemize" deductions.
Date Gift Is Effective
The gift is effective on the date of delivery of certificates in negotiable form to a charity or its agent (postmark date if certificates are mailed). If securities are held in "street name," the gift is effective on the date the transfer is noted on the charity's account. If a new certificate is issued in the name of the charity, the date is when the security is transferred on the books of the transfer agent.
Method of Transfer
Donors who hold the certificates must endorse the securities or sign a stock power and deliver to a charity or its agent. Where securities are held in street name, the transfer can be made to a charity's account or be delivered to a charity's agent in negotiable form.
Valuation of Gift Assets
The value is the mean between the high and low or the bid and ask price on the date of the gift, based on published figures or quotes from securities dealers. Gifts of mutual funds are measured by "net asset value" or the bid on the date of delivery of certificates in negotiable form or the date of transfer on the books of the transfer agent.
Substantiation Requirements
Securities worth $250 to $500 require a receipt from the charity, with quid pro quo statement. A gift of securities worth more than $500 requires a receipt from the charity and completion of Section A of Form 8283.
Special Considerations
Donors of appreciated securities can qualify for the 50%-of-AGI ceiling by electing to reduce their contribution deductions by 100% of the gain present in the property. This strategy may be attractive where long-term capital gain is insubstantial.
The current value of appreciated securities held long-term (more than one year) is deductible, if transferred to a 50% charity, up to 30% of AGI with a five-year carryover for excess deductions. The ceiling is 20% of AGI for 30% charities, with a five-year carryover. Securities with short-term gain are deductible at cost basis up to 50% of AGI (30% for private foundations).
Capital Gains Considerations
No gain is reportable when donors give appreciated securities, which is advantageous even for taxpayers who do not "itemize" deductions.
Date Gift Is Effective
The gift is effective on the date of delivery of certificates in negotiable form to a charity or its agent (postmark date if certificates are mailed). If securities are held in "street name," the gift is effective on the date the transfer is noted on the charity's account. If a new certificate is issued in the name of the charity, the date is when the security is transferred on the books of the transfer agent.
Method of Transfer
Donors who hold the certificates must endorse the securities or sign a stock power and deliver to a charity or its agent. Where securities are held in street name, the transfer can be made to a charity's account or be delivered to a charity's agent in negotiable form.
Valuation of Gift Assets
The value is the mean between the high and low or the bid and ask price on the date of the gift, based on published figures or quotes from securities dealers. Gifts of mutual funds are measured by "net asset value" or the bid on the date of delivery of certificates in negotiable form or the date of transfer on the books of the transfer agent.
Substantiation Requirements
Securities worth $250 to $500 require a receipt from the charity, with quid pro quo statement. A gift of securities worth more than $500 requires a receipt from the charity and completion of Section A of Form 8283.
Special Considerations
Donors of appreciated securities can qualify for the 50%-of-AGI ceiling by electing to reduce their contribution deductions by 100% of the gain present in the property. This strategy may be attractive where long-term capital gain is insubstantial.
