Gifts of Appreciated Stock

Gifts of appreciated stock directly to Whidbey Presbyterian Church Wills and Endowments are a great way to contribute while reducing your tax burden. A lifetime gift of appreciated securities generally qualifies not only for the income tax deduction, but also avoids the long-term capital gains tax on your "paper profit." Let’s look at how these double tax savings can result in an extremely economical gift.

Here’s an example:

George bought $5,000 worth of stock in 1975. Today, that stock is worth $20,000. If he sells, he will face a capital gains tax on the $15,000 appreciation. (If taxed at the rate of 28%, that’s $4,200!) Instead of selling the stock, he can donate it to Whidbey Presbyterian Church Wills and Endowments. Assuming a 36% tax bracket, George would save $7,200 in income tax, in addition to the $4,200 in capital gains tax. By transferring $20,000 to Whidbey Presbyterian, George can cut his taxes by a total of $11,400.

The full fair market value of the securities, if you have owned them more than one year, is deductible in the year of the gift.

A Deferred Gift Annuity allows you to maximize your tax deduction by deferring your income for a certain amount of time. The longer the income is deferred, the greater your annual income and tax deduction.