Stocking Stuffers

Tax laws offer way to ‘gift it forward’

‘Tis the season of giving, and the best way to “gift it forward” is by offering a gift in the form of appreciated stock (or securities) to a charitable organization. It’s the most effective means of tax savings available, and it helps an organization dear to your heart do good work for the community.

Quick Guide to Gifting 
Appreciated Stock

  • Satisfaction in knowing your money is invested in a cause important to you
  • Avoid capital gains taxes on the stock
  • Eligible to receive an income tax charitable deduction for the full fair market value of the stock at the time of the gift

To qualify for these special tax advantages—avoiding capital gains and receiving an income tax charitable deduction—the security or stock must have been held for at least one year. A gift of stock in certificate form must be postmarked by December 31, 2016, but your financial adviser can arrange for a year-end gift of stock from your account.

Your gift of appreciated stock is fully deductible up to 30 percent of your adjusted gross income. For example, if your adjusted gross income is $100,000, up to $30,000 of long-term appreciated stock and other capital gain property may generally be deducted, although high-income donors may be subject to a partial phase-out of itemized deductions. Any excess can generally be carried forward and deducted over as many as five subsequent years.

At a Glance

Let’s compare the tax savings among the options of donating appreciated stock outright, giving a cash gift, and selling stock and donating that cash to your favorite charity. This chart assumes a donation of $10,000 worth of stock purchased for $2,000 several years ago.

Stocking Stuffers 1


This article is provided by RBC Wealth Management on behalf of Gary Kiemele, a Financial Advisor at RBC Wealth Management, and may not be exclusive to this publication. The information included in this article is not intended to be used as the primary basis for making investment decisions. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance.

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.