Gifts of Securities and Stock
While many people only think of cash and payroll deduction contributions to United Way, a gift of securities may be a wiser choice. An individual who contributes stock benefits by:
- Claiming the market value (versus the cost basis) of the securities as a
tax-deductible contribution… - Avoiding capital gains tax on the profit from the sale of securities, lowering the basis of the gift…
How Does It Work?
Assume you purchased 100 shares of XYZ Corporation in 1993 for $2,000. Today, the shares are worth $10,000. If you sold the stock, you would realize an $8,000 capital gain. You wonder if you should use your appreciated stock or cash for an outright gift to United Way's endowment. Here's the comparison:
| POTENTIAL STOCK GIFTS BENEFITS |
Option One: Give stock
|
Option Two: Give cash
|
| A – Gift Value |
$10,000
|
$10,000
|
| B – Capital Gains Tax Savings on $8,000 gain (assumes 20% tax rate and 6% Missouri tax rate) |
($2,080) saved
|
0
|
| C – Ordinary Income Tax Savings (Assumed 31% rate) |
($3,100)
|
($3,100)
|
| D – Gift Cost to You |
($4,820)
|
($6,900)
|
Here's the benefit to you: $2,080!
How?
Contact your broker and request a transfer of securities to United Way of Greater Kansas City. United Way maintains accounts at most of the brokerage firms in metro Kansas City. Please call Debbie Baron at (816) 559-4655 to obtain the correct account number.
Please confirm in writing with United Way all instructions to your broker or bank so that we may properly acknowledge your gift. Send information to: Pat Luce, United Way of Greater Kansas City, 1080 Washington, Kansas City, MO 64105 or fax to
(816) 472-4207.
Example is for illustrative purposes only. Please consult with your financial or tax advisor.
