What to do in order to ensure you can claim a charitable deduction for 2016:
- For donations of cash (including checks), your donation must be either postmarked or personally delivered to the not-for-profit organization on or before December 31.
- For donations of stock, your stock must be transferred out of your account on or before December 31.
- For donations via credit card, your credit card donation must be processed on or before December 31.
Donating long-term appreciated securities can provide additional tax benefits
- When you donate long-term appreciated securities, you can claim a charitable income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.
- You pay no capital gains tax on the transfer.
If you would like to make a donation of stock please contact Lisa Stanger, Executive Director of the Jewish Foundation (203-387-2424, x382; [email protected]) for the Foundation’s stock account information.
For example, if the securities originally cost $2,000 and now have a fair market value of $10,000, you do not pay tax on the $8,000 gain and you may claim a charitable income tax deduction for $10,000.
HOW DO GIFTS OF CASH AND SECURITIES COMPARE?
| Cash | Securities | |||
| Gift Amount | $10,000 | $10,000 | ||
| Initial Cost Basis of Securities/Appreciation | Not Applicable | $2000/$8000 | ||
| Capital Gains Tax Saved or Paid – Assuming 20% Rate* | Not Applicable | $1600 | ||
| Ordinary Income Tax Savings (35% tax bracket x value of gift)** | $3,500 | $3,500 | ||
| Net Tax Savings (ordinary income + capital gain) | $3,500 | $5,100 |
*Please note: A different tax rate may apply to you and, accordingly, the charitable benefit you receive may vary.
**Gifts of securities may be deductible up to 30% of your adjusted gross income, however, excess deductible amounts may be carried forward for five years. Please consult with your own professional to determine your specific situation.