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Gifts
of Appreciated Securities
While many people only think of cash and payroll deduction contributions
to United Way, a gift of securities may be a wiser choice. An
individual who contributes stock benefits by:
- Claiming the market value (versus the cost basis) of the securities
as a tax-deductible contribution
- Avoiding capital gains tax on the profit from the sale of securities,
lowering the cost basis of the gift.
HOW DOES IT WORK?
Assume you purchased 100 shares of XYZ Corporation in 1993 for
$2,000. Today, the shares are worth $10,000. If you
sold the stock, you would realize an $8,000 capital gain. You
wonder if you should use your appreciated stock or cash for an
outright gift to the United Way’s endowment. Here’s
the comparison:
POTENTIAL STOCK
GIFT BENEFITS |
OPTION 1
Give Stock |
OPTION 2
Give cash |
| A – Gift Value |
$10,000 |
$10,000 |
B – Capital Gains Tax
Savings on $8,000 gain
(assumes 20% tax rate and 6% Wisconsin tax rate) |
($2,080)
Saved |
0 |
C – Ordinary Income Tax
Savings
(assumed 31% rate) |
($3,100) |
($3,100) |
| D – Gift cost to you |
$4,820 |
$6,900 |
 |
Here's
the
benefit to you:
$2,080! |
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HOW?
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Contact your broker and request a transfer of securities
to the United Way of Jefferson and North Walworth Counties. United
Way maintains accounts at most of the brokerage firms in this
area. Please call 920-563-8880 to obtain the correct account
number.
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Please confirm in writing with the United Way of Jefferson
and North Walworth Counties all instructions to your broker
or bank so that we may properly acknowledge your gift. Send information
to: Daniel J. McCrea, United Way of Jefferson and North Walworth
Counties, 611 Grove Street, Fort Atkinson, WI 53538 or fax
920-563-0051.
Example is for illustrative purposes only. Please consult with
your financial or tax advisor.
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