Appreciated Assets

Giving Through Appreciated Assets

By making a gift of appreciated assets, you are able to give more for less. How?

Federal tax laws allow donors to reduce their income taxes through gifts of appreciated property such as securities (stocks, bonds, mutual funds) and real estate. Deducting full market value lets you deduct your initial investment cost plus whatever you have gained from your investment.

Example:

Mr. Lutheran holds shares of XYZ stock currently valued at $10,000, which he purchased 10 years ago for $2,000.

$10,000 in cash vs. $10,000 in securities (cost basis: $2,000)

Gift Value

Tax Savings on Gift

(28% of 10,000)*

Long-term capital gains tax saved or paid, assuming 15% tax rate*

Net tax Benefit

After-tax cost of gift

Option A

Give $10,000 in cash

$10,000

$2,800

N/A

$2,800

$7,200

Option B

Sell $10,000 in securities and give cash

$10,000

$2,800

$1,200 paid

$1,600

$8,400

Option C

Give $10,000 in securities outright

$10,000

$2,800

$1,200 saved

$4,000

$6,000

*Rate is dependent on the amount of your taxable income.

Mr. Lutheran's best option for making a gift is "Option C' - to give the securities outright.

Contact Pastor Maertz (605-886-0672) to be connected with the resources to utilize this planned giving tool.