Many Non Profits depend on the generosity of their supporters to continue their important day to day missions and outreach. One way a Non Profit can encourage more contributions is by informing your supporters about the benefits of giving appreciated stock to your organization.
Let’s say that a contributor is interested in donating $10,000. In return, of course, the person will receive a charitable deduction based on his or her tax bracket. But what if the contributor sold $10,000 worth of stock — purchased one or more years ago for $2,000? After the sale, the supporter wrote a check for $10,000 to your organization.
The result for your not-for-profit is the same, but it is very different for the individual who sold stock to make a contribution. The donor is going to have to report a capital gain of $8,000 and generally pay a federal capital gains tax of 15 percent* ($1,200), as well as state tax. By giving stock, the donor would be exempt from paying capital gains tax.
*Note: The maximum rate for higher – income individuals is now 20 percent. This change only affects singles with taxable income above $400,000, married joint-filing couples with income above $450,000, heads of households with income above $425,000, and married individuals who file separate returns with income above $225,000.
Our non profit team is here to help you. For more information please call us at 248 952 0200.
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