The Benefits of Planned Giving: An Example
Following is an example of a Gift of Appreciated Securities (stock), which benefits MADRE the same way a cash gift does while offering these benefits to the donor:
- A federal tax deduction of the full market value (selling price) for each stock contribution you make.
- No capital gains taxes.
- No federal alternative minimum tax.
|
Current Market Value of Stock Gift |
$10,000 |
|
Cost Basis (Original Cost) |
$2,000 |
|
Capital Gain |
$8,000 |
|
Income Tax Deduction for Donor |
$10,000 |
|
Tax Savings from Deduction |
$3,500 |
|
Capital Gains Tax Avoided ($8,000 x 15% capital gains tax rate) |
$1,200 |
|
Total Tax Savings ($3,500 + $1,200) |
$4,700 |
|
Benefit to MADRE |
$10,000 |
