Contributing Stocks, Bonds, or ETF Shares To Turner Syndrome Foundation
In-kind donations such as stock contributions increase your gift – and your tax deduction – with one simple strategy to eliminate capital gains tax exposure and take a charitable deduction in the amount of the fair market value of shares
Before donating financial securities to Turner Syndrome Foundation be sure to consult a financial or tax advisor. The instructions given below will help you avoid paying tax on the sale of appreciated shares of stock or bonds while still achieving a charitable contribution tax deduction. In order to avoid creating a taxable transaction, the person making the donation should not sell the security; rather she or he should transfer ownership of the security directly to Turner Syndrome Foundation.
Interacting With TSF
It is always wise to contact TSF about your plans before you take any action. In this way TSF can follow up on the transaction and make sure that everything goes as planned. A note to TSF indicating that a transaction is forthcoming would be appreciated. The note should include instructions, if desired, on how to allocate the gift, e.g. current funds, special appeal, etc.
Stock Contributions Fillable Form Upon receipt of this information, your broker will be provided transfer instructions.
Giving Publicly Traded Shares
Shares held by a broker is best given to TSF using broker-to-broker wiring and DTC instruction transfers. Information you may need to give to your broker to transfer shares.
Your broker may request some or all of this information to transfer the stock from your account directly to TSF’s account. In some cases, especially when transferring shares from an account maintained by an employer or the company issuing the shares, you will be involved with the stock’s registrar or transfer agent. If it is a publicly traded stock please have the transfer made to TSF’s brokerage account. The above listed information should suffice in this type of transfer. If you are making a gift of a non-publicly traded stock then different arrangements need to be made. Please contact TSF to make the required arrangements.
Keeping The IRS Happy
Turner Syndrome Foundation will acknowledge your gift with a letter containing the details of the transaction that are shown on TSF’s brokerage account reports. This letter will contain the information and declarations required by the IRS for you to take the deduction. You should retain the acknowledgement letter, as it is a document that verifies your gift for tax purposes.
The acknowledgement letter will not include the dollar value of the gift. Frankly, TSF’s brokerage account statement does not include the share or bond price at the time of the transfer to its account so it can’t be of much help in establishing the value of the gift. In the case of non-cash gifts to charitable organizations, the donor is responsible for valuing the gift for tax purposes. For financial securities your broker may be able to provide the value of the gift at the time of the transfer.
The IRS does permit using the following method for establishing the value of the donation. Take the opening and closing prices of the stock on the day of the transfer transaction and average them. That is considered to be the per share sales price. To determine the donation’s value just multiply the per share price by the number of shares donated.
For More Information:
Mail: P.O. Box 726, Holmdel, NJ 07733
Phone: (800) 594-4585
Example of Stock Contributions
Do you own stock that has gone up appreciably with the current run-up of the stock market? If so, you will have to pay a capital gains tax on the gain when you sell. However you can avoid that tax by donating your stock to TSF and receiving a charitable deduction for the current value.
Here’s how it works.
Lets say you bought $500 worth of stock several years ago and that stock is now worth $1000. You could sell the stock for $1000 and send a check to TSF for $1000. (Thank you!) When tax time comes around, you will have a charitable deduction of $1000 but have to pay capital gains tax on the $500 gain. At 20% this would be $100.
If however you donate the stock directly to TSF, the IRS still gives you the charitable deduction of $1000 but there is no tax on the gain. So you saved $100 on your donation!
If this is of interest to you please contact TSF for details to perform the transfer. Besides stock this can also be done with bonds and exchange traded funds (ETFs).