Receive an immediate tax deduction for the full amount of the fair market value of your stock, as well as bypass capital gains tax liability on your appreciated stock. Transfer your appreciated securities directly to our securities account below for your tax-deductible donation.
Why give stock instead of cash? Here’s how it works:
Cash Donations: When you donate cash to the German Evangelical-Lutheran Church of St. Paul’s, we give you a receipt and you get to deduct the amount donated from your taxable income and thereby reduce your tax payments (i.e. save money).
For instance, if you pay 30% tax, a $1,000 donation means you get to deduct $1,000 from your taxable income and save the tax you would normally have paid on that income: 30%, or $300. In other words, you donated $1,000 but got $300 back from the government, so your out-of-pocket was only $700 ($1,000 - $300 = $700).
Stock Donations: When you donate stock worth more than what you originally paid for it (“appreciated securities”) to the German Evangelical-Lutheran Church of St. Paul’s, you get to deduct the full value of the stock as of the day you donated it from your taxable income. You do not have to pay the capital gains tax on the difference between what you paid and the value today, even though you are getting a tax break on the value today. An equal donation of stock saves more money than one of cash.
For instance, let’s assume you bought 100 shares of ABC Company in January at $5, or $500 in total. Let’s also assume that in June they are worth $10, or $1,000 in total, and you donate them to the German Evangelical-Lutheran Church of St. Paul’s and we give you a receipt for $1,000 of ABC Company stock. Like in the example above, let’s assume your tax rate is 30%.
You now get to deduct $1,000 from your income and save the tax you would normally have paid on that income: 30%, or $300. Just like in the example above, you get $300 back from the government. However, remember, you only paid $500 for the stock in the first place. So your out-of-pocket isn’t $700 but just $200 ($500 paid - $300 gotten back = $200). In this example, you make a $1,000 donation at a cost to you of only $200.
Do you have to pay capital gains tax on the difference between the $500 you paid for the stock and the $1,000 you deduct from your income? No. Normally, if you sold the stock, you would have to pay 30% taxes on this gain and have only $850 of cash left ($1,000-$500=$500 gain. Then, the 30% tax on the $500 gain = $150 tax. So, $1,000-$150=$850 cash left). However, by donating stock, you ignore the capital gain and are not liable for tax on it.
This way, you can donate more ($1,000 instead of $850) and get a higher tax benefit. That’s why it’s such a good idea.
“Do other charities do this?” Yes, religious charities, volunteer fire departments, kidney and other medical charities, you name it. It’s quite standard and normal.
“Have any donations like this taken place yet?” Yes, we have done this before.
Still have questions? Contacts for donations include:
The Moral: DON’T SELL STOCK THAT HAS APPRECIATED! DONATE IT TO THIS WORTHY CAUSE!