How to Donate Stocks to Charity
Donating stocks, securities and mutual fund shares to charity are a great way to support the causes you care about. As a donor, you want to make sure that your gift is making the most impact. An easy way to do that is to give more through tax-efficient strategies. Giving your appreciated assets is far more effective than cash: donating stocks to charity is a great way to benefit nonprofits like Children’s Health, with the added advantage of a tax-deduction and removal of future capital gains.
Are Stock Donations Tax-Deductible?
Appreciated stock donations come with great tax benefits: Yes, a donor may claim the full, fair market value of appreciated stock donations as a charitable deduction on their income tax and avoid capital gains tax on the increase of the appreciated stocks that are donated. For you to get a tax benefit for an existing tax year, the gift of appreciated stock to charity must be completed on or before December 31 of that year. You can also gift appreciated stock as part of your legacy by making Children’s Health the beneficiary of stock in your will.
How to Donate Stocks to Charity: Step-by-Step
Step 1: Children’s Medical Center Foundation accepts stock donations via our website, by calling or mail
Step 2: Determine which stocks and how many shares you want to donate. Note that if you work with a broker, you may also want to include them in this step
Step 3: Fill out all stock donation transfer forms (from both the broker and Children’s Medical Center Foundation if needed) – these forms could be in writing or electronic. Please contact Gift Planning at 214-456-8360 or giftplanning@childrens.com. Let us know what is being contributed, and we will provide the instructions necessary to complete the gift OR visit childrens.com/mywill and follow the instructions listed. If actual stock certificates are being used, please mail the unsigned stock certificates by certified mail to: Gift Planning Children’s Medical Center Foundation 2777 N. Stemmons Fwy., Suite 1700 Dallas, Texas 75207
Each stock donation must also have a signed stock power that should mailed to the same address at the same time. Please mail the stock certificates and stock powers in separate envelopes
If the stock donation is registered in more than one name, each person must sign the stock power form. Sign only your name(s) on the stock power form and sign exactly as your name appears on the stock certificate.
Please include a note with the stock certificates indicating the designation of your gift
Step 4: Submit all completed transfer forms accordingly
Step 5: Notify Children’s Medical Center Foundation that the stock donation transfer is in process
Step 6: Follow up with Children’s Medical Center Foundation to confirm the stock donation was completed and request a tax receipt and letter of acknowledgement
Step 7: Report the stock donations when you file your tax return
Frequently Asked Questions About Donating Stocks
Are stock donations to charity tax deductible?
Yes, stock donations to charity are tax deductible. Some individuals and households may be able to take advantage of IRS tax provisions to claim a charitable tax deduction for the full, fair market value of the stock, and may avoid paying capital gains tax on the transfer.
How much stock can I donate to charity?
With stock donations to charity, you are limited to 30% of your Adjusted Gross Income, meaning you may need to carry deductions into future tax years if your contribution exceeds this threshold (this carryforward is good for up to 5 years).
How do I report a gift of stock to a charity?
With your tax return, you need to report the stock donation to charity on IRS Form 8283, used for your noncash charitable contribution.
Can I leave stocks to a charity in my will?
Yes, you can make stock donations to charity as a part of your legacy. If you plan to make a bequest of stock to Children’s Health, we recommend consulting an estate planning attorney.
When is the best time to donate stocks to charity?
For you to get a tax reduction for the existing tax year, the stock donations must be completed on or before December 31 of that year. The tax records will only acknowledge the date your donation was received by Children’s Medical Center Foundation, not the date you initiated the transfer. Plan for your year-end stock donations to meet-up with the tax year.
Is it better to donate stock or cash to charity?
Donating stock is one of the easiest and most tax-smart ways to give more to Children’s Health. By donating stocks to charity, you can potentially reduce future capital gains and rebalance your stock portfolio to maximize its performance and optimize for risk.
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