Gifts of Securities

U.S. tax laws offer a triple tax benefit for gifts of securities (stock, bonds and mutual funds) that have increased in value since purchase or acquisition. Tax benefits donors can receive are: charitable income tax deduction, avoidance of capital gains taxes, and reduction of potential estate taxes. The following example shows the tax benefits donors can receive from gifts of securities versus a gift of cash.

	Gift of Stock	Gift of Cash
Value of the gift	$100,000	$100,000
Income tax savings (25% tax bracket)	$25,000	$25,000
Capital gains tax savings (15% on $80,000 gain)	$12,000	$0
TOTAL TAX SAVINGS	$37,000	$25,000

Determining the Value of the Gift

The tax deduction for a gift of actively traded securities is determined by the average of the highest and lowest quoted sales price on the date of the gift. For a gift of mutual fund shares, your client’s deduction is the public redemption value of the shares on the date of the gift. The date used to value your gift of securities depends upon the way the securities are delivered.

• If the security is hand-delivered, the gift is effective on the date of delivery.
• If the security is mailed, the gift is effective on the postmarked date, assuming the stock power(s) and stock certificate(s) are received in due course.
• If the securities are held in “street name” (in a brokerage account) the date they are transferred into the Nebraska Community Foundation account is the date of the gift.
• For mutual fund shares, the gift is effective when the donor’s shares are transferred into the Nebraska Community Foundation’s account with the mutual fund company. The mutual fund company provides the necessary paperwork.

The Deduction

Charitable deductions for gifts of securities may be up to 30% of your adjusted gross income in the year of the gift. If the total amount of the charitable gifts of appreciated property made in one year exceeds this 30% deduction limit you may carry over that part of your deduction for up to five additional years. For example, if your adjusted gross income for the year is $100,000, up to $30,000 of appreciated property gifts given to the Nebraska Community Foundation or for the benefit of an affiliated fund is deductible this year. Any amount over $30,000 may be carried forward for up to five additional years.

Receiving an Income with a Gift of Securities

To learn how your client can make a charitable gift of securities and receive income from those securities for their lifetime, click here.

Read Frank and Shirley Sibert’s story about a gift of securities to benefit numerous Nebraska charities while providing lifetime income for the couple.

Request Instructions to Gift Securities

Contact the Nebraska Community Foundation to receive instructions on how to make a gift of securities.