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To
make a stock donation to The
Center for Contemporary Dance, Inc., please contact our Donor
Care Department for instructions, either by phone at (407) 695-8366 or via email at
Kim@TheCenterForDance.org.
BENEFITS OF STOCK DONATIONS
You
can realize two tax savings by contributing stock as a gift to The Center for Contemporary Dance,
Inc.:
1.
Deduction for charitable contribution: Federal tax law permits
taxpayers who itemize to deduct the current value of charitable
contributions from their adjusted gross
income. To qualify for such a deduction, the stock must have
been held by the taxpayer for more than one
year.
2. Save on capital gains tax: Contributions of stock may
have no tax liability on the difference between the cost of donated
stock and its current, fair market value (FMV): i.e. there may not
be tax on the capital gains.
Here's
how it can work:
Assume
you purchased 100 shares of XYZ Corporation in 2001 for
$2,000. Today, the shares are worth $10,000. If you sold
the stock, you would realize an $8,000 capital gain. Under
current tax rules and assuming a 20% tax rate, you could owe as much
as $1,600 in federal capital gains tax.
You
decide to make a $10,000 gift to The Center for Contemporary Dance,
Inc. Normally,
you make your gift by check, but this year you decide to see whether
a stock gift would work better for you. Your comparisons are
(federal tax benefits only):
|
|
Option
A Give
Securities As Gift |
Option
B Give
$10,000 by Check |
Option
C Sell
Securities &
Give
Cash |
|
Gift
Value |
$10,000 |
$10,000 |
$10,000 |
|
Ordinary
Income Tax Savings |
$3,960 |
$3,960 |
$3,960 |
|
Capital
Gains Tax
(saved
or paid)
Assuming a 20% Tax Rate |
$1,600 Saved |
N/A |
$1,600 Paid |
|
Net
Tax Savings |
$5,560 |
$3,960 |
$2,360 |
This
example illustrates the potential value of a stock gift and
highlights some of the maximum available benefits. These
benefits depend on a number of things, including the amount of the
stock's appreciation, your adjusted gross income and current federal
tax rules. On the other hand, if you're holding securities at
a loss, sell them first and then donate the cash. That way, you can
claim the loss on your tax return. We strongly advise that you
contact your accountant or other tax advisor to determine the exact
income tax effort of your stock donation to The Center for Contemporary
Dance.
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