Yes! And there are benefits for you and the ministry.
Donating stock is easy to do, and may reduce your income taxes and increase the amount you can contribute. Here’s how it works:
A Christian Camping and Retreat CenterThe Wilderness Fellowship MinistriesFostering Godly Intimacy Since 1972
Donating stock is easy to do, and may reduce your income taxes and increase the amount you can contribute. Here’s how it works:
Let’s say, for example, you bought 100 shares of XYZ Corp. more than a year ago at $20 per share, for a cost basis of $2,000 (100 x $20). If XYZ now trades at $50 per share, the fair market value of your 100 shares has risen to $5,000 (100 x $50). And you have a $3,000 taxable gain ($5,000 market value – $2,000 cost basis).
If you sell those shares and donate the after-tax proceeds, you would owe federal and state income taxes of about $600 assuming a 20% tax rate ($3,000 capital gain x 20% tax rate). After selling and paying taxes, you have $4,400 of cash left over to donate ($5,000 – $600).
You can generally itemize the $4,400 contribution as a charitable tax deduction.
Alternatively, instead of selling shares (Scenario 1), you could donate the same 100 shares of XYZ directly to the Wilderness. The $3,000 capital gain is not recognized for tax purposes, so the $600 in taxes goes away and TWFM benefits from receiving the full $5,000 market value of the donation, instead of only $4,400 in Scenario 1.
You can generally itemize the $5,000 contribution as a charitable tax deduction.
This example assumes the shares given are of a publicly traded company, and you have held the shares for at least one year (called “long-term”). Shares held less than one year (or “short-term”), or shares of a privately held company have different and less advantaged tax implications.
Note: If you have stock with a loss (market value is less than the cost basis), it is usually better to sell it and give the proceeds, not donate it directly, so you can take the loss as a reduction of income on your tax return.
Please consult with your tax advisor about your specific tax situation as the information provided here is general in nature and not intended to be used as tax advice.
— Brian Stephany —
TWFM BOARD TREASURER