Enhance Your Gift and Save Money at the Same Time!
By giving in the form of appreciated securities (stocks), you can realize significant savings on your income taxes.
A Charitable Deduction
Federal law permits taxpayers who itemize to deduct the current value of charitable contributions at the time of the donation from their adjusted gross income.
Avoiding Capital Gains Tax
Capital gains is the difference between what you paid for the donated stock and its current fair market value (FMV). By donating appreciated securities, you may avoid being taxed on the capital gain.
Here's How It Can Work For You
Assume you purchased 100 shares of XYZ Company for $5000. Today, the shares are worth $10,000. If you sold the stock, you would realize a $5,000 capital gain. Under current tax rates, you could owe $750 in federal capital gains tax and $465 in California income tax.
Here is the comparison:
| Option 1
Stock (Net Cost) |
Option 2
Stock (Net Worth) |
Option 3
Cash Donation |
|
| Current Value | $10,000 | $10,000 | $10,000 |
| Original Cost | $5,000 | $5,000 | N/A |
| Capital Gain | $5,000 | $5,000 | N/A |
| Tax Savings |
A
$1215 Savings! |
||
| Federal Capital Gains Tax Avoided By Gift (assuming 15% tax rate) |
$750 | $750 | |
| CA State Income Tax Avoided By Gift (assuming 9.3 % tax rate) |
$465 | $465 | |
| Charitable Deduction (assuming 35% Federal and 9.3% CA State Tax) |
$4,430 | $4,430 | $4,430 |
| Actual Cost of Gift | $5,000 | $10,000 | $10,000 |
| Less Tax Benefit | $4,430 | $5,645 | $4,430 |
| Your True Cost! | $570 | $4,355 | $5,570 |
| Total Benefit to ISTP | $10,000 | $10,000 | $10,000 |
This example takes into consideration several assumptions. Please consult your tax preparer for the specific impact on your taxes.
Valuation For Tax Purposes and Date of Gift
The value of the gift is determined by the value of the securities on the date that the International School of the Peninsula receives them, not on the date you execute the transfer.
How To Donate Stock
If you hold securities in “street name”, that is, you do not have physical possession of the stock certificate, please notify your broker to initiate a “broker-to-broker” transfer. This will transfer the donated stock from your brokerage account to the International School of the Peninsula’s brokerage account, at which time the school will liquidate the donated stock. Our account information is listed below.
UBS Financial Services (650) 233-7035
Account Number: KP 01760 MM
Account Representative: Michael Deggelman
DTC Number: 0221
Please call UBS Financial Services if:
- You have physical possession of the actual stock certificate.
- You would like to make a gift of mutual fund shares which carry the same tax benefits associated with outright gifts of stock.
For any questions about giving securities, please contact:
Patricia Colin
Director of Development
Phone: (650) 251-8521
Fax: (650) 251-8523
Email: PatriciaColin@istp.org