Stock Donations are a Good Option

Stock Donations are a Good Option

By: Phil Waldron

Did you know that right now might be an excellent time for you to donate stock to Mission UpReach, Inc.?

Firstly, the current stock market is at an all-time high.

On Monday, August 24th CNBC reported the following: “The past week was a big week for markets, with the S&P500 finally recovering its losses from the pandemic selloff and setting new all-time highs. Stocks have been big beneficiaries of the Fed’s easy policies and low interest rates, and Fed officials are widely expected to sound dovish when they meet in the coming week.”

Secondly, there is a big incentive for you to donate stock in lieu of cash.

On Fidelity’s website they talk about donating stock that has increased dramatically in value and say this:

“Make a bigger impact by donating long-term appreciated securities, including stock, bonds, and mutual funds, directly to charity. Compared with donating cash or selling your appreciated securities and contributing the after-tax proceeds, you may be able to automatically increase your gift and your tax deduction. It’s simple and easy. When you donate stock to charity, you’ll generally take a tax deduction for the full fair market value. And because you are donating stock, your contribution and tax deduction may instantly increase over 20%.1 Would you prefer to donate bonds or mutual funds? The same benefits apply.”

This assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%, and that the donor originally planned to sell the stock and contribute the net proceeds (less the capital gains tax and Medicare surtax) to charity.

Another analogy to explain the more technical one provided here by Fidelity might be to say that you have invested perhaps…$5,000 in a stock originally, but now due to the incredible value in the current market it is worth say…$15,000. If this is the case, you could donate all of the $15,000 and immediately take the full value of the current market value ($15,000) as a deduction on your income taxes.

It benefits both you and Mission UpReach to donate the stock because if you sell it and donate the proceeds, instead of donating the actual stock, you will pay income tax on the capital gains portions of the stock.

That would mean that you diminish your tax deduction on your income tax, and it also means that MUR would receive a smaller amount than it would if you donated the stock itself. If you donate the stock, there are no taxes due on the transaction.

If you would like to donate appreciated stock to Mission UpReach, Inc., here are the two very simple steps to make that happen.

First, you need to contact your Broker to verify delivery instructions on your Broker’s side of the transaction.

And second, in addition to following your Broker’s specific instructions, you will need to provide them with the following:

  • Our Corporate Account Name for our 501(c)3 non-profit: Mission UpReach, Inc.
  • Our Tax ID No.: 45-5375339,
  • Our Fidelity Account No.: Z40233150
  • The Type of Account: Corporate Account
  • Fidelity’s Depository Trust Company (DTC) number: 0226
  • Name and address of Fidelity:

Fidelity Investments
Attn: TOA Receives
PO Box 770001
Cincinnati, OH 45277-0036

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