Gifts of Appreciated Stock
Gifts of Stocks and Mutual Funds
How it works
• You transfer securities to Christian Freedom International.
• Christian Freedom International sells your securities and uses the proceeds for its programs.
• You receive gift credit and an immediate income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.
• You pay no capital gains tax on the securities you donate.
• You can direct your gift to a specific fund or purpose.
• You can have the satisfaction of making a significant gift now or funding a life-income gift that benefits Christian Freedom International later.
• Give appreciated securities to Christian Freedom International and you shall receive — a tax break. Whether it’s 100 shares of blue-chip stock or a new high-tech gadget, our government does indeed allow you to deduct these gifts as charitable donations. Moreover, you also avoid capital gains tax on the transfer.
• This double benefit means that you can leverage a larger donation by using appreciated securities rather than cash to make your gift.
Can I deduct the full amount of my gift?
• Yes, within this limitation: the IRS says that you can deduct gifts of appreciated assets up to 30% of your adjusted gross income. Thus, if your AGI will be $100,000 this year, you will be able to deduct up to $30,000 in gifts of stock. However, a gift in excess of the 30% amount is not wasted because the IRS allows you to carry forward excess deductions through the five tax years following the year of your gift.
I have appreciated stock that pays me a dividend, albeit pretty small; if I donate it, I’ll lose the little income it provides. But, if I sell it, I’ll have to pay capital gains. Is there a solution?
There is. A number of plans allow you to make gifts while retaining a fixed or variable income for life or a specified period of time. Through the use of such plans, it can be possible for appreciated securities to be sold and reinvested with reduced or eliminated capital gains tax. The entire value of the contributed asset is then available to experience greater earnings than you might otherwise achieve.
Is it difficult to transfer securities?
Not at all. If your broker holds the shares, he or she should call our office at 800-323-2273. If you hold the shares yourself, use two envelopes. In the first envelope, place the unendorsed certificates. Then, in a separate envelope mail a signed stock power for each stock certificate. Stock powers may be obtained from your bank or brokerage house. Please use certified mail.
How to contribute gifts of securities
Making gifts of appreciated securities need not be complicated. When giving securities, be sure to consult with your financial advisors and/or attorney. Additional time should be allowed for completion of such gift transactions.
Securities held by your broker
Inform your broker in writing that you wish to give appreciated securities to Christian Freedom International. Be sure to let the broker know when you’d like the transfer made. Your broker will need to call us at 800-323-2273 to obtain pertinent account information.
Certificates you hold
If you hold the actual stock certificates, you will need to sign a stock power form for each certificate you contribute. You may obtain a stock power from any broker or financial institution. When you sign the power, be sure to sign your name precisely as it appears on the certificate.
When mailing the certificates, use two envelopes. In the first envelope, place the unendorsed certificates. In the second envelope, place the completed stock power(s). Send them to us on the same day by certified mail. Our address is:
Christian Freedom International P.O. Box 560 Sault Ste. Marie, MI 49783
Mutual fund transfers usually take a longer time to transfer as each mutual fund company has its own requirements for making charitable contributions. Contact the customer service department at your company to secure the forms needed and then call us at 800-323-2273 to discuss your intent. We may need to create an account with your mutual fund company before the transfer can occur, so allow at least one month for the transfer.
If you’re interested in supporting Christian Freedom through gifts of appreciated stock, please Contact Us.