How To Make A Difference: Stock Donations
If you own long-term appreciated stocks in the U.S., donating the stock instead of cash helps the charity and has significant tax benefits to you. If you sell the stock in order to donate cash, you have to pay capital gains taxes and as a result, have less to give and write-off from your taxes as a charitable donation. However, if you simply donate the stock to the charity and they sell it, they do not have to pay taxes because of their 501c3 status. This not only puts more money in their pocket instead of the IRS, but it also allows you to have a higher tax deduction since you can write off the entire appreciated amount from your taxable income as a charitable donation. The charity gets more money and you get a double tax break. If you invest and donate to charity, this is a no brainer. Please note that you should not do this if it is a short-term investment (held for less than a year) or if the stock has lost value.
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