Like so many adults, Prudence owns stock. She has retirement accounts and investment accounts, which include mutual funds and individual stocks.
Periodically, Prudence reviews her portfolio to see which securities are increasing in value and which are declining. Some of her holdings have appreciated nicely over time.
Being charitably minded toward Oregon Right to Life Education Foundation, Prudence will occasionally arrange to transfer some of her more highly appreciated stocks to the Oregon Right to Life Education Foundation. ORTLEF will then liquidate the stock and use the cash for its life-saving work. Because ORTLEF is a qualified charity, it doesn’t pay capital gains tax on the sale of the stock.
Were Prudence to sell the stock and give ORTLEF the cash, she would incur capital gains tax on the amount of appreciation and thus reduce the cash value of the stock. Her gift could actually cost her more than the value of her cash gift. Except when a stock has depreciated, it is usually advisable to give the stock to ORTLEF and let us sell it.
In making her stock gift to ORTLEF, Prudence receives an income tax charitable deduction for the full value of her gift, which she can apply against a portion of her gross income. Prudence’s creative gift giving not only helps save lives, it provides her significant tax benefits as well.
We recommend contacting your financial advisor for up-to-date information to determine the giving option that is best for you. Oregon Right to Life welcomes your questions regarding charitable giving. Please contact our office at 503-463-8563.
