Transferring Appreciated Securities to Charity

With some stocks reaching record highs in 2020, investors may be considering liquidating assets to make charitable contributions this year. However, transferring appreciated securities to Boca Helping Hands directly, rather than selling them first to generate funds for a donation, may reduce your tax burden and could potentially increase the impact of your gift.

Generally, if you’ve held publicly-traded securities (such as stocks, bonds, exchange-traded funds (ETFs) or mutual funds) for at least a year, and you itemize deductions on your tax return, then transferring these assets to a public charity can maximize your potential tax benefits. By transferring the securities instead of selling them and donating the proceeds, you can avoid the capital gains tax, which could increase the amount of your charitable gift by 20% (and possibly as much as 23.3%, if also avoiding the Medicare tax on passive income). In addition, if you are able to claim a fair market value charitable deduction for the tax year in which the gift is made, you could also choose to pass on that savings by giving more.

While Congress eliminated required minimum distributions from IRAs for 2020, donors can obtain certain tax benefits if directing a qualified charitable distribution from their retirement accounts to Boca Helping Hands.

Annual limits do apply to charitable deductions. As always, you should consult with a tax, legal, or financial advisor to determine how any of these strategies would relate to your personal tax situation.