Q & A - Appreciated Securities Offer Big Giving Advantages

A recent study showed 80% of donors own appreciated assets, such as stocks, mutual funds or bonds, but only 21% of these donors have given appreciated assets to charity. Gifting appreciated securities, instead of cash, is an advantageous way to make significant, transformational gifts to your favorite charities.

Can I give appreciated securities to Rice? Yes! You can transfer long term (held for more than a year) publicly traded securities, including stocks, bonds and mutual funds, to Rice as a way to maximize your gift and receive additional tax benefits.

What are the tax benefits? If you were to sell the stock, rather than gift it, you would pay capital gains taxes on the increase in value. Depending on your marital status and income, these capital gains taxes could potentially be as high as 20%. By donating your stock to charity, you avoid the capital gains tax entirely. In addition, you receive a charitable income tax deduction for the valuation of the stock on the date of the gift.

Are there still benefits to giving stock in a down market? Yes! Regardless of the current state of the market, it is likely your stocks have appreciated over time. The benefit of donating those stocks and avoiding capital gains tax still holds. In addition, after donating your stock outright to charity, you can buy new shares of the same stock again within the day if you so choose. This allows you to make a tax-savvy gift while maintaining your portfolio, no matter the market.

Giving securities sounds like an excellent option for me - how do I do it? It's easy. Simply reach out to a member of the Rice development team to receive transfer instructions. Fill out the form and send it to your financial advisor and please copy Melanie Boyd at [email protected]. Doing so gives us a "heads up" to be on the lookout for your gift.

Can I use appreciated securities to create a Charitable Gift Annuity (CGA) or a Charitable Remainder Trust (CRT)? Absolutely! You will work with a gift planning team member to receive an illustration of benefits based on a gift of your shares, and then you will receive specific securities transfer instructions. In addition to giving you and/or your loved ones annual payments for life or a term of years, CGAs and CRTs also offer a charitable tax deduction and avoid the upfront hit from capital gains tax that is normally incurred when you sell appreciated securities. Instead, the capital gains tax will be spread over your life income payments, and you may even avoid some of those taxes altogether. To learn more, or for a personal illustration of how these options can work for you, please contact us at [email protected] or call 713-348-4624.

To learn more, or for a personal illustration of how these options can work for you, please contact us at [email protected] or call 713-348-4624.