They could sell the stock, pay the tax on the capital gains, and either keep or donate the proceeds. If, instead of selling the stock, Ted and Alicia gave the 300 shares to their charity, they would not incur any capital gains and would be able to deduct the current value (300 shares X $36 = $10,800) as a charitable gift. By donating the stock, the charity receives more than it would receive if Ted and Alicia first sold the stock and then donated the proceeds after deducting the capital gains taxes. Also, Ted and Alicia receive a greater tax deduction by giving the stock directly to the charity and avoiding the capital gains tax.
While the gift of appreciated assets often involves stock, other marketable assets, such as land, antiques, and homes, can be utilized as potential gifts with the possibility of valuable tax benefits. For more information about gifts of appreciated assets, please contact us so that we can respond to your specific needs.
For more information please contact Chris Whitehead at 417-862-9249.