Most of us have worthy causes in mind for year-end giving, but it can be challenging to leverage our gift for the greatest impact and biggest tax advantage. Perhaps you could just write a check. However, with the stock market at an all-time high, that might not be the best move for you or for your charity.
Any money invested in securities in taxable accounts has likely produced some significant, unrealized capital gains. Eventually, these result in hefty tax bills. But, if you donate those appreciated securities that you have owned for at least a year, you may eliminate capital gains taxes and claim the value of the donation as a charitable deduction for 2017.
“If you want to give, donating an appreciated asset is always a smart move instead of making cash donations, especially now with the current market valuations,” says Dan Grover, a senior private wealth advisor at Ronald Blue Trust in Charlotte, North Carolina.
Take advantage of current tax laws. They may change next year. If the current tax reform bill passes, the value of donating an appreciated asset next year will be lower.