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4 Reasons Why Donors Should Consider Appreciated Gifts

As the year 2013 comes to a close, individuals may be looking for ways to decrease their tax liability and support charitable organizations. While most are aware of tax incentives associated with cash contributions, many are in the dark when it comes to appreciated gifts.

Here are four reasons why donors should consider appreciated gifts, such as stock, mutual funds, and bonds, instead of cash:

1. Make charitable dollars go farther. (Make more of a difference!)
Donating appreciated stock to qualified charities, rather than selling assets and donating the cash, is the best and easiest way for donors to give more.

2. Take a tax deduction for the full fair market value of the donated securities.
Appreciated securities that were purchased over one year ago and have a current value greater than the original cost, may be donated to qualified charities. A tax deduction may be taken for the full fair market value of the securities—up to 30% of the donor’s adjusted gross income. Donors should always consult their tax advisors regarding their gift of securities and available tax incentives.

3. Avoid capital gains tax.
Capital gains tax will not be triggered on donated stock, as the donor did not actually sell the stock, but donated it.

4. Reduce the value of your estate.
For high-wealth individuals, donating appreciated gifts may be an effective means for reducing their estate’s value.

Don’t wait—now’s the time to make sure your donors know about the benefits associated with appreciated gifts. After all, educating donors about their options could lead to more year-end support. And that means more for your mission.

Jack Abdo, CPA, is AEM’s Nonprofit Segment Leader. A true “numbers guy,” Jack’s passion for financial statements is second only to his passion for helping nonprofits further their mission. You can reach Jack at 952.715.3051 or at jack.abdo@aemcpas.com.

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