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Your path to this gift:
You're considering an outright gift made during your lifetime > You're holding stocks that have risen in value > You want to maximize your deduction but not affect your cash flow
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The most common appreciated asset, and the easiest to donate, is marketable stocks and bonds. The IRS still offers you a notable tax break for charitable gifts: you may deduct the full, fair market value of appreciated assets that you give us, and also avoid capital gains liability on the transfer. This means that you can leverage a larger donation if you use an appreciated asset to make your gift instead of cash.
How you can give more with appreciated stock vs. cash:
Suppose you purchased 2,000 shares of Company X stock at $10 per share and it is currently worth $50 per share. You have been considering making a generous gift to Syracuse and now you are trying to decide the best strategy. Remember that in addition to receiving an income tax deduction for the fair market value of the gift, giving appreciated securities allows the donor to avoid the capital gain that would have been realized had they sold the asset instead. Assume 35% federal income tax and 15% capital gains tax.
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Giving Cash
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Giving Stock |
| Charitable Gift |
$100,000 |
$100,000
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| Capital Gains Tax Saved |
$0 |
$12,000
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Income Tax Savings
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$35,000 |
$35,000 |
Net Cost of Gift to You
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$65,000
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$53,000
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So by giving appreciated securities, the net cost to you is $12,000 less and you have essentially made a $100,000 gift to Syracuse with the $20,000 that you originally used to purchase the stock!
Many of our donors are also surprised to find that they can often give more to Syracuse through stock gifts with the same net cost as that of a cash gift.
Assume the same parameters from the example above including a 35% federal income tax and 15% capital gains tax. In this case, by giving stock rather than cash, you could increase your gift to the University by over 22% or $22,642!
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Giving Cash
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Giving Stock |
| Charitable Gift |
$100,000 |
$122,642
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| Capital Gains Tax Saved |
$0 |
$14,717
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Income Tax Savings
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$35,000 |
$42,925 |
Net Cost of Gift to You
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$65,000
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$65,000
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- How will your gift of stock be valued? It's the average of the high and low prices for the stock on the date of the transfer to us. If the high bid was $80 and the low was $70 on the day you made your gift, your deduction will be $75 per share.
- When is your gift complete? If your stock is held by your broker, it's the date the shares reach our account. If you hold the stock yourself and mail it to us, it's the postmark date on the envelope.
- How should you transfer securities to us? Please click here for the instructions and forms you will need to complete the transfer. You can also contact Dona Schuman, Sr. Director for Advancement Services, at 315-443-3773 or dmschuma@syr.edu.
- Can you deduct the full amount of your gift? Yes, within this limitation: the IRS says that you can deduct gifts of appreciated assets up to 30 percent of your adjusted gross income ("AGI" -- the figure at the bottom of the first page of Form 1040. See glossary for full definition). Thus, if your AGI will be $100,000 this year, you will be able to deduct up to $30,000 in gifts of stock. A gift in excess of the 30 percent amount is not wasted, however, because the IRS allows you to carry forward excess deductions through the five tax years following the year of your gift.
Note that the IRS allows cash gifts to be deducted up to 50 percent of adjusted gross income. Therefore, the deduction for a large gift of appreciated assets could take longer to claim than the deduction for the same gift made in cash. But if the donated assets had a small cost basis, they could still be more tax-efficient to use than cash.
If you are considering a gift of appreciated securities, email us, complete the personal illustration form, or call us at 315-443-3773 so that we can assist you through every step of the process.
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