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EXAMPLES:
The following contains examples for both selling a security and then contributing the net proceeds to the charity or contributing the appreciated securities directly to the charity. In the examples the marketable security has a FMV of $10,000, cost basis of $2,000, and has been held for greater than 12 months.
SALE OF SECURITY - THEN CONTRIBUTE:
If you sold the security and donated the proceeds, you would pay capital gains tax on any appreciation, additional cash of $1,840 would be required to receive a $10,000 charitable contribution.
| Fair Market Value @ Date of Sale |
$ 10,000 A |
| Cost Basis |
$ 2,000 |
| Capital Gain on Sale of Security |
$ 8,000 |
| Tax Rate 23% (Federal 20% and State 3%) |
23% |
| Tax on Sale |
$1, 840 B |
| Net Proceeds (A-B) |
$ 8,160 |
| Additional cash |
$ 1,840 |
| Charitable Contribution Deduction (1040 Sch. A) |
$ 10,000 |
| Tax Rate - Federal |
40% |
| Tax Savings |
$ 4,000 |
CONTRIBUTE APPRECIATED PROPERTY:
If you donate the appreciated security directly to the charity, you escape the capital gains tax and receive a deduction for the property's fair market value.
| FMV @ Date of Contribution |
$ 10,000 |
| Amount Given to Charity |
$ 10,000 |
| Charitable Contribution Deduction (1040 Sch. A) |
$ 10,000 |
| Tax Rate- Federal |
40% |
| Tax Savings |
$ 4,000 |
| SUMMARY: |
| |
Amount to Charity |
Tax Savings |
Net Cost |
Sale of Security -
Then Contribute |
$ 10,000 |
$ 4,000 |
$ 7,840 |
Contribute Appreciated
Property |
$ 10,000 |
$ 4,000 |
$ 6,000 |
Please contact Stefanie Boles, Assistant Vice President of Finance and Administration by phone at 203 772-2010, 219 or email: sboles@uwgnh.org if you have any questions.
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