4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things to know about this type of giving.

Investment gifting is awesome.These Donations Are Tax Deductible

Donating investments that have gained value will give you tax deductions equal to the current market value, not what you bought them for.

This is only applicable if you are itemizing enough things on your tax return to qualify for a deduction, however.

Donating Cash Has Fewer Tax Advantages

Giving appreciated stock is far better than giving cash — even if you were to sell an investment and then donate the cash, you would have to pay capital gains taxes first. You don’t have to pay them if you just donate the shares.

Hold for at Least One Year

If you held an investment for less than one year, the tax deduction would be treated differently. For example, you bought 100 shares of XYZ at $10 per share. Six months later, you decide to donate those 100 shares. At the time of donation, XYZ is now $15 per share.  Your donation is worth $1,500. 

However, you held the stock for less than one year so your deduction is limited to your cost basis. That means you are only allowed to deduct the $500 difference between the price you bought XYZ and the price it was when you donated it.

Donor Advised Fund

If you are unsure of where you would like to donate your appreciated asset(s), you can instead give to a donor-advised fundThis type of fund has two advantages. One, you are still able to deduct the donated amount. Two, if you are undecided on where you want to donate your appreciated asset(s), you can use the donor-advised fund as a holding vehicle until you decide.

Donate an Investment Gift

Although you should not need an incentive to donate to the less fortunate, gifting appreciated assets is beneficial to both parties. As the year comes closer to ending, the time to plan your taxes is fast approaching, and with that determine what kind of donations to make.

Save More Money in 2018

Coins 1523383 1920

Subscribe and join the worldwide 52-week money challenge! Get the tools you need right to your inbox.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Share this post:

Related Posts

Leave a Comment


Valentine's Day gifts that won't destroy your budget

Valentine’s Day Crafts Are Romantic Rescue from Crazy Inflation

Fall for the hype this week and you’re out an average of $143.56 for Valentine’s Day. Crafts and other do-it-yourself tactics... more →

Ultimate Guide to Bitcoin — FREE Ebook!

Have we got something for you: a free ebook about bitcoin! more →
Get a flu vaccine.

Why You Need To Get a Flu Vaccine Right Now

Flu vaccines aren’t just for the elderly  anymore. Here are 25 reasons you should go get vaccinated. more →
Financially successful

Acquire the Trait All Financially Successful People Have

Financially successful people tend to all have a lot of self-discipline. Improving your discipline in one area of your life often spills... more →

What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →

Tips for Teaching Young Adults About Finances

One of the biggest problems facing parents is that they need to teach their children about finance. This can be a tricky subject to... more →