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Stocks, Bonds, Mutual Funds, GIC’s
This is a popular way to make a planned gift. It is easy to do and the financial incentives are substantial. In some ways, donating securities can be smarter than donating cash.
Here is a sample scenario: you wish to donate $50,000 to the Church through the parish or the Archdiocese. Let’s assume you bought $25,000 in stocks a decade or two ago and they are now worth $50,000.
Option A: Sell the stock and donate the cash. If you simply sell the shares, you have a capital gain of $25,000. There is a capital gain of $25,000. There is a capital gain tax that must be paid (up to 46%), that would result in tax savings of around $11,500. Net cost to donation $50,000: $38,000.
Option B: Donate the stock. You get to claim the entire $50,000 as a tax deduction and you don’t have to pay any capital gain tax. The tax savings would be around $23,000. Net cost to donate $50,000: $27,000.
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